Luxury brand Hermes emerged victorious in a US lawsuit against NFT artist Mason Rothschild regarding trademark infringement. The legal battle concluded with Hermes securing a permanent ban on the sale of Rothschild’s ‘MetaBirkin’ NFTs.
Rothschild had created 100 ‘MetaBirkin’ NFTs, featuring Birkin handbags adorned with colorful fur, which falsely implied that Hermes endorsed these NFTs. The jury sided with Hermes, ruling that Rothschild had violated the luxury house’s trademark rights pertaining to the Birkin handbag-inspired NFTs.
US District Judge Jed Rakoff stated that the continued marketing of ‘MetaBirkin’ NFTs could potentially confuse consumers and harm the company. Rakoff added that Rothschild’s intention was to defraud customers by using variations of Hermes’ trademarks. These NFTs were launched with the purpose of misleading people into believing that Hermes endorsed the ‘MetaBirkin’ NFTs.
Rothschild argued that his works were an absurdist statement on luxury goods and should be protected under the First Amendment of the US Constitution, allowing the use of trademarks in an artistic manner without explicitly misleading consumers. However, Rakoff denied Rothschild’s request to dismiss the verdict or hold a new trial, stating that the First Amendment does not shield him from liability in such fraudulent schemes.
In February, a jury ruled in favor of Hermes and awarded the company $133,000 in compensation. In March, Hermes claimed that Rothschild continued to sell the NFTs even after the jury’s verdict and requested the court to intervene and halt his marketing of the tokens. The luxury brand also demanded that Rothschild surrender his remaining tokens and post-trial profits.
Rothschild expressed his disapproval, stating that Hermes’ request went beyond what is appropriate in a case involving artistic expression. While Rakoff granted Hermes’ request, he decided not to order Rothschild to transfer the NFTs, citing an “abundance of caution” in regard to First Amendment concerns.
This lawsuit marks an important development as more luxury brands venture into the NFT space. It becomes increasingly challenging for customers to differentiate between brand-endorsed NFTs and fraudulent schemes. Recently, Starbucks announced the debut of its First Store Collection NFT series, and Nike held a public sale for its virtual sneaker NFT series.
