Enter to open, tab to navigate, enter to select
Jury Finds MetaBirkin NFTs Infringe Hermès' Trademark Rights
Practical Law Legal Update w-038-4666 (Approx. 4 pages)
Jury Finds MetaBirkin NFTs Infringe Hermès' Trademark Rights
by Practical Law Intellectual Property & Technology
| Published on 09 Feb 2023 • USA (National/Federal) |
In Hermès International v. Rothschild, a federal jury found that Mason Rothschild's use of MetaBirkin non-fungible tokens (NFTs) infringed Hermès trademark rights and was not protected from liability by the First Amendment.
On February 8, 2023, in Hermès International v. Rothschild, a federal jury found that Mason Rothschild's use of MetaBirkin non-fungible tokens (NFTs) infringed Hermès trademark rights and was not protected from liability by the First Amendment (No. 1:22-cv-00384 (S.D.N.Y. Feb. 8, 2023)).
Hermès International and Hermès of Paris, Inc. (together, "Hermès") operate a fashion brand offering luxury accessories, including the Birkin handbag. Hermès owns trademark rights in the Hermès and Birkin marks and trade dress rights in the Birkin handbag design. Around December 2021, Mason Rothschild, an entrepreneur, developed a collection of NFTs titled "MetaBirkins" consisting of digital images depicting faux-fur-covered Birkin handbags. Rothschild marketed the MetaBirkins NFT collection on various social media platforms and sold NFTs in the collection on marketplaces at prices close to Birkin's real-world value.
Upon its discovery of the MetaBirkins, Hermès sued Rothschild in the Southern District of New York alleging trademark infringement and dilution, as well as cybersquatting.
In the proceedings prior to trial, the district court:
- Denied Rothschild's Rule 12(b)(6) motion to dismiss the claims and held that:
- the digital images associated with the MetaBirkins NFTs could constitute a form of artistic expression; and
- the Rogers test balancing free speech and trademark rights applied to its analysis of trademark infringement involving the MetaBirkin NFTs.
- Denied cross-motions for summary judgment, and in doing so:
- reaffirmed its determination that the Rogers test for evaluating trademark infringement in artistic works is applicable to Hermès' claims in this case;
- held that "MetaBirkins" should be understood to refer to both the NFTs and the associated digital images; and
- held that genuine issues of fact remained precluding summary judgment.
The case proceeded to trial and, on February 8, 2023, the jury returned a verdict:
- Finding Rothschild liable for trademark infringement, trademark dilution, and cybersquatting.
- Finding Rothschild's use of the mark not to be protected from liability by the First Amendment.
- Awarding Hermès a total of $133,000 in net profits and damages.
This verdict shows that brands can successfully defend their marks against use in NFTs, even when the use may be considered artistic expression.
While the court in this case instructed the jury to consider both the NFTs and the associated digital images and apply the Rogers test, another court that recently considered trademark use in NFTs found that the Rogers test did not apply (see Yuga Labs, Inc. v. Ripps, (C.D. Cal. Dec. 16, 2022) (holding Rogers test inapplicable where the infringing NFTs merely point to plaintiff's work)). In light of these cases, counsel for brand owners must understand NFT technology and monitor developments as the legal relationship between NFTs and trademarks continues to evolve.