On Feb 8, a jury trial in the Southern District of New York reached a verdict in Hermès' lawsuit against MetaBirkins. The court ruled that artist Mason Rothschild had violated the trademark protections of the brand Hermès. Rothschild's 100 "Metabirkins" NFTs were found to not be artistic commentary and therefore not protected by the First Amendment of the US Constitution.
According to a report by Vogue Business, a nine-member jury found Rothschild liable for trademark infringement, trademark dilution, and "cybersquatting," awarding Hermès $133,000 in damages. Notably, the decision marks the first time the relationship between digital art, NFTs, and physical fashion has been addressed in court. Hermès argued that NFTs represent a new product category, while Rothschild argued that there is no such thing as a digital twin. Rothschild said he plans to appeal the verdict.
In response to the court’s decision, the artist took to his Twitter account to express his disappointment. He shared:
“A broken justice system that doesn’t allow an art expert to speak on art but allows economists to speak on it. That’s what happened today. What happened today was wrong. What happened today will continue to happen if we don’t continue to fight. This is far from over.”
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.
A multibillion dollar luxury fashion house who says they “care” about art and artists but..
— Mason Rothschild (@MasonRothschild) February 8, 2023
This case is expected to have far-reaching implications for the use of NFTs by artists and for the protection of intellectual property in the metaverse. Blockchain and tech lawyer Michael Kasdan who has been following the case for a while now shared his thoughts on the ruling on Twitter. According to him, “It would have been more surprising and a 'bigger deal' in terms of changing the status quo if Rothschild had won.”
My 2 cents FWIW on the #Hermes v Rothschild #MetaBirkins verdict:
I’m not terribly surprised the jury found for Hermes. And I think it was probably the right result. Anecdotally, when people I knew heard or saw “MetaBirkins,” many did think “Oh, that’s Hermes.”
— Michael Kasdan (@michaelkasdan) February 8, 2023
Related: Intellectual property has an awkward fit in Web3 decentralization — Lawyers
As previously reported by Cointelegraph, court documents filed on Jan. 23 revealed that Hermès believed that the collection improperly used the Birkin trademark and potentially confused customers into believing the luxury brand was in support of the project.
In September 2022, Cointelegraph spoke to David Kappos, a partner at Cravath, Swaine & Moore LLP, who noted that the tension between Intellectual Property (IP) and decentralization does not have a clear solution. When asked about third parties creating digital artworks or wearables of branded products, Kappos advised that “an unlicensed implementer in a Web3 environment should refrain from creating a wearable that is confusingly similar to a brand owned by a third party — the same as in the real world.”