Trademark Protection in the Metaverse
French luxury design house, Hermes, won an intellectual property case against Mason Rothschild, the seller of “MetaBirkins” NFTs that depicted Hermes’ iconic “Birkin” handbag covered in colorful fur. A federal jury in Manhattan awarded Hermes $133,000 in damages ($110,000 for trademark infringement and $23,000 for cyber squatting) from Rothschild, who created and sold the MetaBirkins NFTs.
Hermes argued that the unauthorized use violated Hermes’ rights to the Birkin trademark. Hermes further claimed that the Rothschild was profiting from the images of their designer bag and that the MetaBirkins NFTs forestalled Hermes’ plans to enter into the NFT market.
Rothschild defended the case with an argument that the MetaBirkins NFTs were part of an “artistic experiment” and that the NFTs are artistic works protected by the First Amendment. He compared his artistic use of the Birkin bag in the MetaBirkins NFTs to the works of the late Andy Warhol, such as Warhol’s famous paintings of the Campbell’s soup cans and Coca-Cola bottles.
This case is significant because it was the first case to reach a jury on the issue of infringement of trademark, and product design trade dress, by an NFT. Rothschild is likely to appeal the jury’s decision.