Patent Poetry: Hermès Wins Lawsuit Over NFT Birkin Bags | AEON law
Hermès wins court case
Above NFT Birkins.
NFTs are not “speech”
Luxury fashion brand Hermès has won a lawsuit against artist Mason Rothschild, who produced non-fungible tokens (NFTs) he called “MetaBirkins”.
As the New York Times reported,
a nine-person federal jury in Manhattan found that Rothschild had infringed the company’s trademark rights and awarded Hermès $133,000 in total damages. The jurors also found that his NFTs were not protected speech.
As we discussed in this previous blog,
An NFT is an asset verified using blockchain technology, where a network of computers records transactions and provides buyers with proof of authenticity and ownership.
An NFT is analogous to a receipt, a deed to a house or a pink slip for a car – rather than to conventional intellectual property (IP) such as a patent, trademark or copyright.
However, artwork related to an NFT can be protected as IP, and an NFT can infringe the IP on which it is based – as in this case
(Yes, we know it’s confusing…)
A Birkin bag (shown above) is a very expensive bag with a distinctive shape, made from exotic leathers such as crocodile, ostrich and alligator. The bag’s hardware is gold or palladium plated. Bags sell from $8,500 to $300,000 new.
Vintage Birkin bags are also highly valued, and their sale price increased by 42% at auction from 2019 to 2020. In 2021, auction house Sotheby’s sold a Birkin for more than $226,000.
“Birkin” is a Hermès trademark. As Times notes,
Birkin bags, named after actress Jane Birkin, are handcrafted and take specialist artisans a minimum of 18 hours to make. Hermès does not disclose how many of the bags it has made since they were first created in 1984, but some luxury goods researchers have estimated that there are now more than a million Birkins on the market.
Sales of Birkin bags generate around $100 million per year.
However, as Madison Avenue Couture notes,
You can’t just walk into an Hermès store and buy a Birkin. It requires becoming a regular customer in a store, and building and maintaining a “profile” – a history of purchases from the brand across many of the Hermès product categories, such as shoes, scarves, ready-to-wear and home goods. Therefore, the listed retail prices of Birkins contradict the “all in” price of the bag, which can be double or triple the list price. Amazingly, even after creating a profile with multiple purchases, you are not guaranteed to be able to purchase the Birkin in the size, color, leather or hardware you want.
As The Guardian reported,
Rothschild produced the bags in 100 whimsical pieces that showed bags covered in rainbow colored shag fur or in green fur, wearing a red Santa hat.
Rothschild (real name Sonny Estival) claimed that his NFT art based on the bags was comparable to Andy Warhol’s silk screens of Campbell’s soup cans – an absurdist commentary on the excesses of the fashion world.
Art critic Blake Gopnik favorably compared MetaBirkins to artworks by both Andy Warhol and Damien Hirst.
Hermès claimed that the trademark was diluted and that potential consumers could be tricked into buying the unaffiliated MetaBirkin NFTs, believing them to be created by Hermès.
As Times noted, “up for debate was whether NFTs or non-fungible tokens are strictly goods or art shielded by the First Amendment.”
The Times concluded:
Rothschild’s defeat was a major blow to the NFT market, which has often described itself as part of the creative economy. But the jury ruled that the MetaBirkins looked more like goods, which are subject to strict trademark laws that prevent copying, than works of art where appropriation is protected.
Just like the haiku above, we like to keep our posts short and sweet. Hopefully you found this bite-sized information useful.
