First NFT Trademark Trial Pits Hermès Against Metabirkin Artist – Bloomberg Law

French luxury design house Hermès International SA’s upcoming trademark trial against digital artist Mason Rothschild—the first of its kind—will test the boundaries of artistic expression and how nonfungible tokens are viewed in the eyes of decades-old intellectual property law.

Hermès on Monday will argue to a Manhattan federal jury that Rothschild violated trademark law by creating and selling “MetaBirkin” NFTs, which depict digital images of the famous Birkin handbag.

But Rothschild will counter that the MetaBirkin NFTs are artworks, no different from Andy Warhol’s silkscreen prints of Campbell’s soup cans, and are therefore protected by the First Amendment. The MetaBirkins show the Birkin handbag, which in real life can cost tens of thousands of dollars, covered in cartoonish, colorful fur instead of leather.

Rothschild said his 100 MetaBirkin NFTs, released in late 2021 at the Art Basel fair in Miami, provide commentary on the way that society places artistic value on status symbols and high valued goods.

“We’re at a point in trademark law, and First Amendment law, and changes in technology that have all been coming together in an avalanche of cases in the last couple of years,” said Felicia Boyd, head of IP brands at Norton Rose Fulbright US LLP. “The legal teams from both sides are very skilled, and they have teed up the issues for long-term review.”

Rothschild is represented by Lex Lumina PLLC, a recently formed intellectual property law firm composed of a group of renowned IP scholars from Harvard University, New York University, and the University of California Los Angeles.

Even if Rothschild does prevail in front of the jury, the fact that Hermès’ suit made it all the way to trial may already send a signal to the NFT art community that incorporating trademarks into their work may put them in legal trouble.

“This question is really interesting because we really need to determine exactly what NFTs are,” said Gai Sher, senior counsel at Greenspoon Marder LLP. “Are they artistic expressions, or are they functional commercial products?”

Trademarks on NFTs

Hermès argued in the lawsuit, filed a year ago in the US District Court for the Southern District of New York, that Rothschild’s use of the “MetaBirkin” name for his NFT project improperly appropriated the Birkin trademark.

Citing social media posts and press coverage, the complaint said that consumers were duped into believing that the NFTs were created or endorsed by Hermès, which isn’t the case.

Hermès accused Rothschild of harming the fashion brand’s ability to enter the NFT space, which has seen explosive growth since the start of the pandemic, though it’s cooled in the past year as the crypto market crashed.

NFTs use blockchain technology to link images with a unique digital identifier and have become particularly popular among digital artists.

Rothschild might try to argue that consumers wouldn’t be confused because Hermès is using the trademark on a real world handbag while he is using it on a digital asset, but that likely won’t be sufficient, attorneys say.

Even though Hermès doesn’t currently sell NFTs, “the fashion industry has been one of the standard bearers in digital assets,” said Michelle Cooke, an IP attorne