In 2023, new rules and regulations are entering the NFT space at an unprecedented rate. The FTX collapse put Web3 regulation into overdrive, and major NFT projects are underway. investigated for fraud. However, perhaps the best evidence of this turnaround is the recent resolution of the Hermès v. Rothschild.
Last year, 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. On February 8, 2023, Hermès won the lawsuit. A jury found that Rothschild’s NFT bag collection bore such a striking resemblance to Hermès Birkin bags that it was “likely to cause confusion and error in the public mind.” Hermès ultimately won the lawsuit after just six days of proceedings in a Manhattan court.
While many expected a ruling that the sale of the NFTs violated Hermès’ rights to the “Birkin” trademark, the finding that the Rothschild NFTs are not Speech protected under the First Amendment understandably sparked quite a bit of conversation on Web3. The situation, and what it means for the future of Web3, is best distilled through the reactions of the attorneys and attorneys familiar with the case.
What lawyers and solicitors have to say
In a statement sent to nft now, Jonathan Harris, a lawyer for the Rothschilds, hinted that the lawsuit would be a blow to independent artists around the world and a boon to big brands. Specifically, he stated that the decision marked a “good day for luxury brands” and a “bad day for artists.” Another of Rothschild’s lawyers, Rhett Millsaps, issued a similar statement to nft now. “Great day for the big brands. Terrible day for artists and the First Amendment,” he said.
Talking with him financial times, Gaëtan Cordier, a partner at Eversheds Sutherland in Paris, said it was an “important decision” and a reminder that a lack of regulation does not mean people are free to do what they want without ramifications. Ultimately, he argued, he sends a “message to NFT developers, reminding them that, absent specific regulations, intellectual property standards that apply both in the physical world and on the Internet still apply to NFTs.” .
Meanwhile, Megan Noh, an arts attorney unaffiliated with the case, has officially stated that the closure of the case will likely open the floodgates and lead to a host of new brands entering Web3. “Some brand owners have likely been waiting for better guidance before jumping into Web3 and enforcing their brands in that space.” she told the New York Times. Noh added that this verdict would finally provide brands with the necessary guidance, “specifically in the context of digital artworks and collectibles, on the line between works of artistic expression and commercial goods.”
In a previous nft now article, Andrew Rossow, a lawyer who focuses on fintech and intellectual property law, noted that the case will ultimately determine how future Web3 cases will be decided. “The Hermès vs. 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,” he wrote.
However, statements made by David Leichtman, managing partner at Leichtman Law, indicate that the case may not have as wide an impact as many believe. Speaking in Coin Desk TV, Leichtman noted that the case was not really about what qualifies as art or even the Rothschild’s use of the Birkin mark in their work. Rather, he pointed out that the case was specifically about whether Rothschild intended mislead consumers into thinking that MetaBirkin NFTs were associated with Hermès. “The question is, were they [consumers] it’s really going to be confused with the MetaBirkins, whether or not the relevant consumer public for Hermès products is confused with the defendant’s works,” he said.
Rebecca Tushnet, a Harvard Law School professor who helped prepare Rothschild’s defense, apparently reinforced Leichtman’s understanding that the case is more about intent than free speech and the First Amendment. In a statement, she noted that “no one can be held responsible for infringement unless their work is artistically irrelevant or explicitly misleading.”
Food to go
Who has the reason? It’s hard 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 to Web3. And in light of the spin-off and copycat NFT collections that are frequently released in response to notable brands (like Porsche) entering the space, Web3 creators should think carefully before launching – or buying – new NFTs.