MANHATTAN (CN) — Luxury French design house Hermès triumphed on Wednesday in its trademark suit over MetaBirkins NFTs creator Mason Rothschild, establishing the first federal precedent for litigating the popular digital art commodities.
Concluding one of the first federal intellectual-property trials over digital tokens known as NFTs, a New York jury returned a verdict on the third day of deliberation, finding the 28-year old digital artist behind MetaBirkins liable to Hermès on counts of trademark infringement, trademark dilution and cybersquatting.
The jury found no First Amendment protections for the MetaBirkins NFTs creator and awarded the luxury brand $133,000 in damages.
NFTs are uniquely identifiable digital assets whose authenticity has been certified on a blockchain, the transparent and secure digital ledgers that support the creation of many forms of digital assets, including NFTs and cryptocurrencies.
The NFTs at issue in the Hermès civil trademark case were titled MetaBirkins, a series of 100 digital art pieces inspired by the iconic Hermès Birkin handbag depict a range of purportedly reimagined prurses adorned in assorted colorful and quirky fur designs.
Rothschild launched the Metabirkins NFT project, dubbed “Not your mother’s Birkin,” on December 2, 2021, at Art Basel, an annual winter art fair in Miami Beach, Florida. He offered them for sale to users directly via a “smart” contract and on the OpenSea NFT marketplace, until OpenSea — the largest NFT marketplace — agreed with Hermès and removed the infringing sales from its platform.
Rothschild has said that his NFTs are a tribute to the famed Birkin bag and a commentary on consumerism and animal cruelty within the fashion industry.
“I mean, for me, there's nothing more iconic than the Hermès Birkin bag,” he told Yahoo Finance in December 2021. “And I wanted to see as an experiment to see if I could create that same kind of illusion that it has in real life as a digital commodity.”
Hermès brought a federal complaint a month later in Manhattan civil court, alleging that Rothschild “simply rips off Hermès’ famous Birkin trademark by adding the generic prefix ‘meta’ to the famous trademark Birkin.” Hermès asserted that any artistic expression was incidental at best, and Rothschild's true intention was to confuse people into thinking his MetaBirkins NFTs were sponsored by or associated with Hermès.
Rothschild argued that the virtual handbags are works of artistic expression protected by the First Amendment, “just as it gave Andy Warhol the right to make and sell art depicting Campbell’s soup cans.”
“The First Amendment guarantees his right to respond in the marketplace of ideas to the inescapable corporate brand messages by which we are bombarded every day, virtually everywhere we look,” Rothschild’s attorney Rhett O. Millsaps wrote in an unsuccessful motion to dismiss Hermès’ suit before the case went to trial.
Paul R. Gugliuzza, law professor at Temple University Beasley School of Law, said MetaBirkins’ similarities to a Warhol-type appropriation artist defense against trademark infringement are superficial at best and “would have been a very hard case for the defendant to win.”
“There are two things that jumped out at me as probably weighing very heavily on the jury’s decision to find against the artist here. One, it’s pretty clear that the artist is trying to kind of unfairly capitalize on the recognition of the mark or the good will behind the mark,” Gugliuzza told Courthouse News on Wednesday afternoon. “And two, there’s a potential for confusion that the mark owner could be affiliated with the NFT project.”
In contrast to Warhol’s famed soup cans, Gugliuzza continued, “Warhol’s not trying to capitalize on the fame of Campbells Soup by using the cans in his art, and there’s not really not a risk that consumers would be confused that Andy Warhol and Campbells are entering into some sort of joint venture here."
“Whereas here you have Hermès — it’s a very valuable, very noted luxury brand — with no specific relevance to the work," Gugliuzza said. "It seems like the artist could have used any luxury brand: Hermès or Chanel or Balanciega, whatever.
“Lots of brands and famous people are getting into the NFT market, so it would not be surprising for someone to see or think an Hermès-backed or Hermès-sponsored NFT, whereas a Campbells Soup-backed work of art by Andy Warhol seems a little more far-fetched,” he said.
Rothschild derided the verdict on Wednesday afternoon as “a broken justice system that doesn’t allow an art expert to speak on art but allows economists to speak on it.”
“Take nine people off the street right now and ask them to tell you what art is, but the kicker is whatever they say will now become the undisputed truth. That’s what happened today,” the Los Angeles-based NFT digital artist said in a statement following the verdict. “A multibillion dollar luxury fashion house who says they ‘care’ about art and artists but feel they have the right to choose what art IS and who IS an artist.
"Not because of what they create but because their CV doesn’t scream artist with a pedigree from a world class art school," said Rothschild, who has a tattoo of a skull sketched by provocative English artist Damien Hirst, famous for accusations of copyright infringement.
“What happened today was wrong,” he continued. “What happened today will continue to happen if we don’t continue to fight. This is far from over.”
In his instructions to the jury, U.S. District Judge Jed S. Rakoff explained that if Hermès proved by preponderance of the evidence that Rothschild actually intended to confuse potential customers, he waived any First Amendment protection.
“It is undisputed, however, that the MetaBirkins NFTs, including the associated images, are in at least some respects works of artistic expression, such as, for example, in their addition of a total fur covering to the Birkin bag images,” the Clinton-appointed senior judge wrote. “Given that, Mr. Rothschild is protected from liability on any of Hermès' claims unless Hermès proves by a preponderance of the evidence that Mr. Rothschild's use of the Birkin mark was not just likely to confuse potential consumers but was intentionally designed to mislead potential consumers into believing that Hermès was associated with Mr. Rothschild's MetaBirkins project.”
Last October, the Supreme Court heard arguments over whether Warhol’s series of silkscreen paintings of the late singer Prince qualified as transformative and protected against copyright claims by the photographer who shot the source material of the legendary musician.
Two months later, former president Donald Trump stepped into the NFT arena with the launch of the Trump Digital Trading Cards, featuring artwork “inspired by President Trump’s extraordinary life & career.”
Forty-five thousand Trump NFTs were minted in December 2022 on Polygon, an Ethereum cryptocurrency sidechain. Each Trump trading card NFT was coined for $99, and all tokens sold out in less than 12 hours, generating $4.35 million.
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