But Is It Art? New York Jury Says No - It's Trademark Infringement in the Metaverse

To quote a headline from French daily Libération, “Hermès 1, NFT 0.”

On February 8, a federal jury in New York sided with France’s storied luxury fashion company, Hermès International S.A., in a trademark battle against LA-based digital artist Mason Rothschild. The closely-watched case was expected to be a bellwether for the strength of traditional trademark and trade dress rights in the realm of crypto assets and virtual fashion. Tellingly, trademark rights prevailed.

Rothschild had launched a “MetaBirkin” line of non-fungible tokens, or NFTs, that closely resembled Hermès Birkin bags, telling Business of Fashion they were “my artistic take on an icon, my remix.” Hermès was not amused, arguing that the MetaBirkins were an attempt to profit from the fame of its Birkin mark. Actual Birkin bags, named for 60s darling Jane Birkin, have sold for hundreds of thousands at auction.

Juries are often unsympathetic to large companies that lock horns with artists. Here, the decision to award Hermès $133,000 in damages, encompassing Rothschild’s profits from selling the MetaBirkins and his cybersquatting on the MetaBirkins.com domain, suggests that the artist’s commercialization of his work – and, perhaps, his reference to the MetaBirkins as a “gold mine” in personal text messages – influenced this jury’s interpretation of the facts. While these damages may not be a significant amount for Hermès, they’re a real dressing down for Rothschild, who had presented himself as a new Andy Warhol.

The case also lends credence to the idea that differences between the real world and the digital world are superficial, at least when fair competition and free expression are at odds. Brand owners may rejoice at this result, but future NFT cases will still require an untangling of messy facts.