Jury Pages with Hermès in Pivotal NFT Trademark Case | Polsinelli
On February 8, 2023, a federal jury awarded Hermès International and Hermès of Paris, Inc. (“Hermès”) $133,000 in the trademark lawsuit against designer Mason Rothschild. Hermès sued Rothschild for selling non-fungible tokens (NFTs) of METABIRKINS in the metaverse, thereby infringing and diluting Hermès’ BIRKIN brand used for luxury handbags.
A New Frontier: The Metaverse and NFTs
NFTs are exchanged in the metaverse. The metaverse is a virtual place teeming with many of the same activities that occur in the physical world – spending time with friends, playing games, shopping, and going to sporting events or concerts.
This case is the first to provide some guidance in the United States as consumers navigate the metaverse and NFT markets as holders seek to protect their valuable trademarks.
What makes the Hermès case important is that the infringing goods are virtual, not physical, replicas of Hermès’ BIRKIN® bags. Rothschild created the MetaBirkin bags as NFTs, which are digital assets that are rare, unique collectibles and can be extremely valuable. To put the value of owning an NFT into perspective, think of the value of owning the physical original of the Mona Lisa or perhaps The Beatles’ masters.
Hermès Bags a win
A federal jury sitting in US District Judge Jed S. Rakoff’s court in the Southern District of New York found Rothschild liable for trademark infringement, dilution and cybersquatting (due to his registration of the MetaBirkins.com domain name).
Hermès filed a lawsuit against Rothschild in January 2022. Hermès alleged that Rothschild was intentionally trying to seek fortune by exchanging Hermès’ “real” rights for “virtual rights”. Rothschild admitted that he chose to sell his NFTs as METABIRKINS because a BIRKIN bag is extraordinarily valuable in the physical world. Additionally, he used the BIRKIN mark not only to identify his NFTs, but also for his social media accounts and his Discord channel, and he registered the MetaBirkins.com domain name.
Rothschild first sold a single NFT, known as the “Baby Birkin NFT”, which consisted of an animation of Hermès’ BIRKIN bag with a fetus displayed on top of a transparent version of the bag. The Baby Birkin NFT sold for $23,500 and later resold for $47,000. Due to the success of the Baby Birkin NFT, Rothschild created a line of 100 digital collectibles created on the Ethereum blockchain and featuring BIRKIN handbags covered in fur and listed for sale under the METABIRKINS brand. Rothschild was handsomely rewarded for selling the METABIRKIN NFTs. By January 6, 2022, the METABIRKINS NFTs exceeded $1.1 million in sales.
Rothschild argued that he was an artist and therefore entitled to a First Amendment “fair use” defense. According to Rothschild, like Andy Warhol’s artwork, Campbell soup cans, selling his METABIRKINS NFTs was not his attempt to pass off his artwork as associated with BIRKIN handbags; he was simply selling the “expression” of a Birkin.1
But at trial, Hermès presented evidence of news reports falsely stating that METBIRKINS was connected to or endorsed by Hermès, bolstering claims that the NFT artwork caused confusion, a key element in establishing trademark infringement.
The Hermès jury disagreed with Rothschild, and by giving Hermès a win, the metaverse gives both designers and brand owners an indication of how to avoid liability and how to prevail against infringers, respectively. However, brand owners should keep in mind that trademark decisions are fact-specific, and some of the facts in the Hermès case may have influenced the jury in finding for Hermès.
Beware the brand protection metaverse
As demonstrated by this case, brand owners such as Hermès who are not interested in participating in the metaverse can nevertheless be drawn into it, and forced to devote resources to protecting their brands in the virtual space.
Political brands in the metaverse pose a significant challenge. While the metaverse is still evolving, sales that rely on a brand’s goodwill can accrue to someone other than the brand owner. Brand owners interested in offering their goods and services virtually in the metaverse should consider taking proactive measures to protect their brands, such as filing trademark applications. Even brand owners with no immediate plans to enter the metaverse should diligently monitor their brands in that space and send takedown notices to platforms where their protected brands are being infringed upon.
1 Andrew Rossow, Esq., The Hermès lawsuit could dictate the future of NFTsNFT NOW, 30 January 2023,
