“MetaBirkins” Packed: NFT Creator Found Liable for Trademark Infringement | Jones Day
In a closely watched trademark infringement case involving non-fungible tokens (“NFTs”), a jury found that the sale of digital images of Hermès’ Birkin bags as NFTs infringed and diluted Hermès’ trademarks.
Rejecting arguments that NFTs depicting Birkin handbags with colorful fur are entitled to First Amendment protection, on February 8, 2023, a jury in the Southern District of New York found artist Mason Rothschild liable for infringing and diluting the trademarks of Hermès International (“Hermès”). The jury also found that Rothschild’s registration of the MetaBirkins.com domain name constituted cybersquatting.
This case was the first to try the question of whether the copying of a real brand could be qualified by an NFT as protected artistic expression. Hermès claimed that Rothschild’s “MetaBirkin” NFTs caused consumer confusion and interfered with their efforts to enter the NFT space. In contrast, Rothschild argued that the sale of his fur-covered blurred images of “Metabirkin” NFTs was a form of protected expression as a reference to the fashion industry’s anti-fur movement and as a commentary on the Birkin bag’s influence on modern society. As such, Rothschild argued that he was immune from liability under the First Amendment, raising the issue of whether NFTs were the type of artistic expression that could be covered by Rogers v. Grimaldi test.
On summary judgment, Judge Rakoff ruled that “MetaBirkin” NFTs could constitute a form of artistic expression and held that Rogers v. Grimaldi test applied to Hermès’ claims. Under Rogers, trademark use as part of an expressive work is protected by the First Amendment if the use is both (i) artistically relevant and (ii) not otherwise explicitly misleading. In addition to the Rogers defense, Rothschild argued that confusion was not likely because the “MetaBirkin” images are not simply reproductions of Birkin bags (but rather are fanciful depictions), are not actual handbags, and given the market prices of the parties’ products, consumers would carefully check the full description of The “MetaBirkin” NFTs before buying.
Held in Rogers Nevertheless, after a five-day trial, the jury found that the NFTs were not art protected by the First Amendment, finding in favor of Hermès on all claims and awarding Hermès $110,000 for Rothschild’s net profits and $23,000 in statutory damages for cybersquatting.
The decision is the first to analyze infringement of a real trademark in a virtual context and should be considered by both trademark owners and NFT creators as they consider the limits of First Amendment protections in connection with the creation and sale of NFTs. The thing is Hermes International et al. v. RothschildCase No. 1:22-cv-00384 (SDNY).
