Weekend Briefing: Fashion NFT’s trademark limits will be decided in court
Several lawsuits throughout the fashion industry will set precedents for everything from NFT trademark limits to how many stripes can be on a pair of socks. Read on for an overview of some of these lawsuits, as well as a look at California’s new fur ban and the impact that Balenciaga’s advertising scandal last year will have on Kering’s revenue. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, Sr. fashion reporter
The fashion industry’s legal team is getting a workout right now as several lawsuits continue between the brands. Adidas is suing Thom Browne for, for example, the designer’s use of stripes. While Adidas was content to avoid a lawsuit when Thom Browne added a fourth stripe to distinguish it from Adidas’ signature three stripes, designers’ recent foray into sportswear has led to a lawsuit from Adidas.
At Hermes, the luxury company is suing artist Mason Rothschild for his sale of “MetaBirkins,” NFTs based on Hermes’ Birkin bags, but which Hermes had nothing to do with. The trial is set to begin on January 30. Hermes’ argument is simple trademark infringement, while Rothschild will argue that the NFTs have clear “parodic” and “absurdist” intent.
The lawsuit is reminiscent of a similar ongoing legal conflict between Nike and StockX. The former sued the latter for selling NFTs featuring images of Nike sneakers. StockX’s argument at the time was that the NFTs are merely token ownership rights to a real pair of sneakers held in StockX’s vault.
StockX and Rothschild are taking essentially opposite approaches to the legal action they have faced from the brands whose images they used in NFTs: StockX argues that their NFTs are legal because they are closely related to the real product StockX owns and should not considered as a separate entity. Rothschild’s argument, however, is that his NFTs are so distinct from the Birkin bags they depict, that they should be considered their own works of art.
The outcome of both cases will set precedents and shape the future of NFTs in fashion.
California is officially a fur-free state
A California law passed in 2019 finally went into effect on January 1, banning the sale of fur in the state. Notably, the bill does not prevent the sale of used fur, so resale and consignment platforms, especially for fur-loving luxury consumers, will have an advantage in California for now.
But in general, fur has become less popular across fashion in recent years, with major luxury brands such as Moncler, Chanel and all Kering brands no longer selling it. Over the next decade, new fur clothing may become an obscure offering across fashion.
Balenciaga’s scandal will affect Kering’s earnings
According to a new report from bank HSBC, the Balenciaga scandal that rocked the company late last year is likely to have a tangible impact on Kering’s upcoming earnings, due to be reported in February. Kering’s fourth-quarter earnings will be “as bad as it gets,” the report said. Balenciaga accounts for approximately 10% of Kering’s sales.
This inhibits Kering’s growth mindset. The company had hoped that the end of 2022 and into 2023 would be a period of additional growth. But Alessandro Michele leaving Gucci, the Balenciaga scandal and the slowdown in international luxury sales, especially in China, could set Kering back.
