Hermes International SA is poised to embark on a landmark trademark trial against digital artist Mason Rothschild, which will probe the implications of artistic expression and nonfungible tokens (NFTs) within the context of established intellectual property law. The French luxury design house alleges that Rothschild’s creation and sale of MetaBirkin NFTs—digital images depicting its iconic Birkin handbag adorned with cartoonish, colourful fur instead of leather—violate trademark regulations. Rothschild, however, contends that his limited-edition MetaBirkins, released at Art Basel Miami, is akin to Andy Warhol’s silkscreen prints featuring Campbell’s soup cans; protected under the First Amendment as they offer commentary on societal attitudes towards costly status symbols and prized commodities.
Felicia Boyd, Head of IP Brands at Norton Rose Fulbright US LLP, remarked on the recent convergence of trademark law and First Amendment law, as well as technological advancements that have resulted in a surge of related cases. Rothschild is represented by Lex Lumina PLLC—a newly founded intellectual property firm composed of esteemed scholars from Harvard University, New York University, and the University of California Los Angeles. Both parties have effectively presented arguments for a long-term review. Whether Rothschild will prevail is uncertain; however, Hermes’ lawsuit progressing to trial may already be a cautionary tale for the NFT art community about the potential legal complications of incorporating trademarks into their work. Gai Sher, Senior Counsel at Greenspoon Marder LLP, asked, “Are they artistic expressions or functional commercial products?”
Hermes filed a lawsuit in the US District Court for the Southern District of New York against Rothschild, asserting that his MetaBirkin NFT project constitutes an unlawful appropriation of their trademarked Birkin name. Furthermore, according to the complaint, social media posts and press coverage have misled consumers into believing that these NFTs were created or endorsed by Hermes. The fashion brand claims that this infringement has hindered its entry into the rapidly growing field of NFTs, which has lost its lustre due to the recent crypto market crash.
NFTs, which employ blockchain technology, have gained popularity among digital artists. IP attorney Michelle Cooke of Arent Fox Schiff LLP notes that the fashion industry has been “one of the standard bearers in digital assets,” as luxury brands such as Louis Vuitton U.K., Gucci, and Nike Inc. have begun selling their NFTs. This development presents a challenge for Hermes, which has not yet ventured into selling related NFT products. Rothschild could attempt to argue that this could lead consumers to believe they can purchase these items from Hermes, although legal experts say this argument is unlikely to hold up in court.
According to IP attorney Jessica Neer McDonald, numerous brands are applying for trademark registrations for their digital assets. Most of these filings are on an intent-to-use basis, meaning the brand has not yet sold any NFTs. Consumer confusion is a pervasive issue in the industry, extending beyond the actions or omissions of any particular brand owner. In his lawsuit, Rothschild relies heavily on the Rogers test, which seeks to balance free speech rights and protect trademarks from infringement by safeguarding expression rather than ideas. Rothschild contends that MetaBirkins should be considered protected expressions under this balancing act since they attempt to satirise art pieces with intentional irony rather than merely replicating them without commentary.
The 1989 case of Rogers v. Grimaldi established a test that permits artists to use trademarks in their work without permission, provided there is a minimal level of artistic relevance and no suggestion of consumer confusion. Rothschild filed a motion in February claiming his NFTs met these criteria; however, Judge Jed S. Rakoff.