In a trademark battle between an NFT artist and Hermès, the artist just lost • TechCrunch

Artist Mason Rothschild thought he was sitting on a “gold mine” when he started creating digital versions of the iconic Hermès Birkin bag and selling these as NFTs. Among them was an animated piece called “Baby Birkin” depicting a human fetus floating inside that was eventually snapped up by a buyer for $47,000 at the height of the NFT frenzy in December 2021.

Unsurprisingly, Hermès loved the art project less, and the powerful luxury brand just won a copyright infringement case against Rothschild that could have far-reaching consequences for NFT creators whose inspiration is real-world goods protected by intellectual property laws.

Although Rothschild’s lawyers argued that NFTs are works of art protected by the First Amendment, much like Andy Warhol’s screen prints of Campbell’s soup cans, in a Manhattan courtroom a nine-person jury awarded Hermès $133,000 in damages after finding more similar NFTs to consumer products subject to strict trademark laws that protect brands against imitations.

Hermès argued during a week-long trial that NFTs confused shoppers, some of whom believed the items were associated with the brand, it argued. Rothschild’s camp claimed the confusion was minimal.

Hermès also claimed that Rothschild’s “MetaBirkins” project was muddy water that Hermès itself plans to enter eventually, and for which it is actively developing plans. “If we want to bring our bag into this virtual world, there will always be a reference to MetaBirkins,” Hermès general counsel Nicolas Martin reportedly told the jury during testimony.

Hermès lawyers, according to Bloomberg Law, also pointed to text messages that they said show Rothschild wants to “create the same exclusivity and demand for the famous handbag.” “We are sitting on a gold mine,” Rothschild wrote in a text.

Physical Birkin bags range in price from $12,000 to approximately $450,000 and sometimes even more. (Sotheby’s sold one last year for $2 million; the bag was made of rose gold inlaid with 2,712 diamonds.)

According to the New York Times, Birkin bags require a minimum of 18 hours to make by hand, with an estimated one million handbags on the market, although the bags are still considered among the rarest in the world.

Rothschild had apparently planned to make 1,000 MetaBirkins, but had released only 100. As Bloomberg Law notes, Rothschild initially sold the NFTs for around $450 each, but their resale rose to tens of thousands of dollars, as with the “Baby Birkin.” (Other of Rothschild’s creations include a digital Birkin bag with shaggy green fur.)

As of January 2022, when Hermès first sent Rothschild a cease-and-desist letter, Rothschild claimed MetaBirkins had a trading volume of $1.1 million.

Hermès is used to inspiring artists, although most of them cannot scale their work as easily as Rothschild. For example, there’s currently a Kelly green sculpture of a Birkin bag for sale on high-end consignment site 1st Dibs. Cast in resin and made in 2015, a Brooklyn gallery is asking $6,500 for the piece and says others like it are available in pink, white, gold and silver.

There is no doubt that the work itself is also important. In response to Warhol’s 1962 series of paintings of Campbell Soup cans, the product marketing manager of the Campbell Soup Company did not threaten him; instead, he sent a letter to Warhol, expressing the company’s admiration.