On 8 February 2023, the Manhattan federal jury ruled in favour of Hermès in the lawsuit over digital artworks of “MetaBirkins” in the form of non-fungible tokens (NFTs) mirroring the world famous Birkin bags created by the artist Mason Rothschild.
In about December 2021 Mason Rothschild received from Hermès’ attorneys a cease and desist letter alleging that he was infringing Hermès’ US registered trade mark “BIRKIN” by way of selling NFTs named MetaBirkins. The artist argued that his NFTs are shielded from trade mark claims by “the First Amendment which gives me every right to create art based on my interpretations of the world around me.” The first MetaBirkin NFT was sold for USD42,000 which is equivalent to the market value of a Birkin bag (basic leather version) in real life. No matter what messages the artist intended to convey through his artwork, whether a “tribute to Hermès’ most famous offering” or a “commentary on fashion’s history of animal cruelty”, Hermès filed the lawsuit with the New York federal court on January 14, 2022 claiming trade mark infringement, false designation of origin, trademark dilution, cybersquatting, and injury to business reputation and dilution under New York General Business Law, and seeking monetary damages, including the profits in selling the NFTs, and injunctive relief to bar the artist from making further use of the Birkin trade mark.
The case has been closely followed as the first lawsuit to analyse and illustrate the extent to which real world trade mark rights may extend to the Metaverse.
Mason Rothschild is found liable for trademark infringement and dilution and cybersquatting, and ordered to pay Hermès some $133,000 in damages. It is an undeniable fact that Rothschild has made good fortune on the Birkin name – a famous trademark and one of the brand’s most valuable assets – by way of his MetaBirkins NFTs and he does not need real leather, thread and experienced craftsmen in his project. Rothschild’s attorney described the result as “a terrible day for artists and the First Amendment”. Nonetheless the lawsuit has brought Rothschild to the front row of world known artists.
During the trial, the jury showed interest to know whether and when Hermès applied for a digital trademark. The answer is Hermès filed an application in the US to register BIRKIN as a trade mark in classes 9, 35 and 41 for goods and services in the virtual world on 26 August 2022. Maybe the jury is thinking: if Hermès does plan on entering the Metaverse and minting their own NFTs, it is entitled to the priority to do so. From the IP legal perspective though, whether or not Hermès is planning to have presence in the Metaverse space, its IP and trade mark rights should still be properly respected and honoured.
We do not anticipate having an equivalent full blown case in Hong Kong so soon to illustrate whether and how real world trade mark rights may extend to the Metaverse and if the HK court may side on this US ruling. To keep peace, artists and virtual world citizens should always be aware and respectful of others’ IP rights in creating your work.
