No Shirkin’ IP Rights in Birkin: Hermès Wins Trademark Infringement Lawsuit Against Rothschild over “METABIRKINS NFTs”
By John W. McGlynn & Shayne D. Rasay
The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).
Hermès International SA (“Hermès”), a French luxury design house, won a trademark infringement lawsuit against digital artist Mason Rothschild, whose sale of the “MetaBirkin” nonfungible tokens (NFTs) violated Hermès’ intellectual property rights to the “Birkin” trademark, according to a first-of-its-kind Manhattan federal jury verdict delivered on February 8, 2023.
By way of background, NFTs are digital assets that exist on a blockchain and represent tangible or non-tangible items like art, media, memorabilia, and other digital content. As their name suggests, NFTs cannot be copied, substituted, or subdivided (i.e. “non-fungible”), but they can be owned, sold, and bought in the digital world, often with cryptocurrency. For example, ownership of a digital image of the represented tangible or non-tangible item can be established via NFTs. In recent years NFTs have become an increasingly popular way to buy and sell digital artwork.
Rothschild’s “METABIRKINS NFTs,” the subject of the lawsuit, is a series of artwork depicting 100 images of Hermès’ “Birkin” handbags in varying designs, all of which were sold through Rothschild’s website: https://metabirkins.com.
Hermès’ “Birkin” handbags are iconic luxury items that sell for as much as hundreds of thousands of dollars and are commonly featured in popular culture. Hermès owns U.S. federal trademark registrations for both the “BIRKIN” word mark (U.S. Reg. No. 2991927) and the trade dress of the BIRKIN handbag design (U.S. Reg. No. 3936105).
In the Complaint filed on January 14, 2022, Hermès argued that Rothschild’s sale of the METABIRKINS NFTs constitute (i) trademark infringement, (ii) false designation of origin, (iii) trademark dilution, (iv) cybersquatting, (v) injury to business reputation and dilution; (vi) common law trademark infringement, and (vii) misappropriation and unfair competition. Hermès contended consumers were likely to be confused into a mistaken belief that Rothchild’s METABIRKINS NFTs were associated with Hermès, and further asserted that Rothchild’s actions damaged the trademark owner’s ability to sell its own digital goods.
On February 8, 2023, the jury found METABIRKINS NFTs creator Mason Rothschild liable on three counts: trademark infringement, trademark dilution, and cybersquatting, and awarded Hermès $133,000 in damages.
NFTs Are Not Automatically Protected Speech Under the First Amendment
Throughout the case, defendant Rothschild argued that his METABIRKINS NFTs are works of art protected by the First Amendment, analogous to Andy Warhol’s famous paintings featuring Campbell’s soup cans. In denying both Parties’ cross motions for summary judgment, the Court determined that the METABIRKINS NFTs “could constitute a form of artistic expression” and “a court may not strip an artistic work of First Amendment protection merely because the artist seeks to market and sell his creative output.” See Opinion and Order by J. Rakoff regarding the Parties’ Cross Motion for Summary Judgment.
Ultimately, however, the jury concluded that the METABIRKINS NFTs are not shielded by First Amendment protections, as Rothschild’s NFTs were not only likely to cause confusion as to an association with Hermès, but also were intentionally designed to do so.
This is the first high-profile decision involving trademarks for real-world products being asserted against virtual counterparts, but there are a number of similar cases in the pipeline. Only time will tell if other brand owners are likewise successful in asserting intellectual property rights against NFT creators and purveyors of virtual goods. Additional insights may arise from the U.S. Supreme Court’s upcoming review of a trademark infringement case (Jack Daniel’s Properties Inc. v. VIP Products LLC) concerning the use of protected marks in products that the accused infringer asserts are expressive or artistic works deserving of First Amendment protection.
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