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Counterfeiting in the metaverse: Hermès wins MetaBirkins lawsuit

The dispute over the infringement of intellectual property rights related to NFTs depicting the famous MetaBirkin seems to have come to an end with the decision of the U.S. District Court for the Southern District of New York. 

Following the court order in the Italian case brought by the Juventus soccer club, another important piece is added to the intellectual property rights picture regarding digital assets. The decision in question puts an end – at least for now – to the dispute that arose in the United States last year between Hermès and Mason Rothschild, an artist who had offered for sale on various marketplaces a collection of 100 “MetaBirkin” NFTs depicting different versions of the Hermès Birkin bag, considered one of the most iconic products of all times.

A Manhattan federal jury ruled in favour of Hermès in a case against artist Mason Rothschild, who had released MetaBirkin NFTs and, in doing so, was found to have broken trademark infringement laws

A Manhattan federal jury ruled in favour of Hermès in a case against artist Mason Rothschild, who had released MetaBirkin NFTs and, in doing so, was found to have infringed on the company’s trademark rights

Specifically, Hermès claimed that the artist infringed its trademark rights by using the famous word “Birkin” and the related trade dress on the bag’s shape without consent, adding the generic prefix ʻmeta’, which references the virtual world where digital goods such as NFTs are traded. The situation worsened as the artist had also registered the MetaBirkins.com domain and some social media profiles under the same name, creating more likelihood of confusion with the famous fashion house. 

The artist defended his work by claiming that his creations (i.e. the NFTs) were protected by the freedom of expression under the First Amendment of the U.S. Constitution, as they aimed to denounce animal cruelty and the use of fur and leather in the fashion industry. The case captured the attention and was closely monitored by lawyers, artists, and companies around the world because it required the U.S. court to set the boundary between the protection of the exclusive rights attributed to a trademark owner on the one hand and the artists’ freedom of expression on the other, with specific reference to the digital assets. 

Artist Mason Rothschild described his MetaBirkins as an “ironic nod” to the renowned Hermès brand

Artist Mason Rothschild described his MetaBirkins as an “ironic nod” to the renowned Hermès brand

As many expected, the jury and the U.S. District Court for the Southern District of New York extended the principles of intellectual property law commonly applied in the real world to the digital world of NFTs. They concluded that the purely commercial purpose of selling the NFTs in question (from which the artist earned about $1 million) prevailed over artistic freedom and could not exclude an infringement of the brand’s trademark rights. In this regard, the analogy proposed by the defendant between the MetaBirkin NFTs and Andy Warhol’s reworks of the iconic Campbell soup cans was found to be inappropriate.

Equally irrelevant was that Hermès had not yet filed its trademark applications in Class 9 for digital goods when the dispute was brought before the court. In this respect, the court ruled, on the one hand, that the applications the fashion company filed during the pendency of the litigation demonstrated its interest in operating in the NFT sector. On the other hand, they ruled that Hermès’ trademarks for one of its most iconic products enjoyed the broader protection granted to well-known brands. 

Therefore, in a decision dated Feb. 14, 2023, the U.S. court ruled in favour of the French Maison, ordering the artist to pay damages of $110,000 for trademark infringement and $23,000 for cybersquatting. However, Mason Rothschild has already announced that the war is ongoing, so we expect there will be no shortage of twists and turns.

 

 

Valentina Mazza
Law for the Fashion Product Lecturer, three-year courses, Milan
Course
Programme
postgraduate-Master's Degrees • Master's Courses