Courts Offer More Guidance On Enforcing Rights To Brands And ... - JD Supra

Courts Offer More Guidance On Enforcing Rights To Brands And … – JD Supra

[co-author: Rodrigo Velasco Portal]

Non-fungible tokens (NFTs) serve as agile mechanisms to verify an underlying asset’s authenticity and/or ownership linked with it.

For now, minting NFTs to commercialize digital artwork on blockchain domain names continues to be one of the most common schemes for their use.

Background

The ongoing dispute between French luxury brand Hermès International and artist Mason Rothschild continues, and trial is set to begin on Jan. 30, 2023. Defendant Rothschild produced and sold MetaBirkin NFTs, which are digital versions of Hermès’ furry Birkin bags. Plaintiff Hermès argued that the MetaBirkin NFTs infringed its BIRKIN trademark. Rothschild countered that the NFTs were artwork and therefore protected by the test set forth in Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), which held that use of a name or mark for artistic purposes does not necessarily constitute infringement. Specifically, the Rogers test provides that claims of infringement will not apply to titles of creative works unless “the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” Id. at 999. In 2022, prior to setting a trial date, the U.S. District Court for the Southern District of New York denied Rothschild’s motion to dismiss the case but held that the Rogers test applied, setting the stage for the upcoming trial.

The U.S. District Court for the Central District of California recently ruled in another case (Yuga Labs, Inc. v. Ripps, No. CV 22-4355-JFW(JEMX), 2022 WL 18024480, at *1 (C.D. Cal. Dec. 16, 2022)) that the Rogers test does not apply to digital artwork NFTs.

Plaintiff Yuga Labs Inc. (Yuga), the creator and marketer of the well-known “Bored Ape Yacht Club” collection of NFTS (Yuga Bored Ape images), filed a complaint against conceptual artist Ryder Ripps (Ripps) due to his use of Yuga’s BORED APE YACHT CLUB trademark and other marks, including logos and acronyms (BAYC marks) in connection with Ripps’ own Ryder Ripps Bored Ape Yacht Club (RR/BAYC) NFT collection. Ripps claims that the Yuga Bored Ape images were created as part of an alt-right conspiracy. Yuga denies this.

In contrast to Hermes v. Rothschild, the California District Court held that the Rogers test exemption was not applicable due to the fact that the RR/BAYC’s images