Last week, a federal jury in New York City reached a verdict for the plaintiff in the case of Hermès International, et al. v. Mason Rothschild, Case No. 1:22-cv-00384 (S.D.N.Y. Feb. 8, 2023).
Hermès had sued Rothschild for trademark infringement, trademark dilution, and cybersquatting based on his use of digital images of the famous Hermès Birkin bag in his “Meta-Birkin” NFTs. An NFT (non-fungible token) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership. NFTs are typically created and used as digital works of art and auctioned as collectibles.
Rothschild argued that his “Meta-Birkin” NFTs were digital artwork protected by the First Amendment. Under a legal test established in Rogers v. Grimaldi, use of trademarks in titles of works may be protected under the First Amendment if (1) the title has some artistic relevance to the underlying work, and (2) the title is not explicitly misleading as to the source of the content of the work. Rothschild argued that his NFT collection was a work of art and, therefore, his use of the Birkin name was protected by the First Amendment and did not qualify as trademark infringement. He also pointed to the “artistic” nature of the images of the bags covered in colorful faux fur as commentary on the fashion industry’s history of animal cruelty.
On the other side, Hermès rejected Rothschild’s free speech arguments. Hermès claimed that Rothschild used the Birkin name to sell fake Hermès products in the metaverse, and the “MetaBirkins” collection was the title for an art project rather than free speech under the Rogers test. In addition, Hermès argued that Rothschild’s use of the Birkin name along with the unlawful use of the Birkin bag trade dress was further evidence of Rothschild’s intent to capitalize on the Hermès brand and to cause consumer confusion. Although the “MetaBirkins” were digital assets (as opposed to physical assets), Hermès was also able to present evidence of actual consumer confusion.
The jury issued a verdict in favor of Hermès finding Rothschild liable on all counts. The jury awarded Hermès a total of $133,000 in damages – $110,000 on the trademark infringement claim and another $23,000 on the cybersquatting claim.