Intro

The Birkin bag has long been known as an iconic symbol of exclusivity. Featured in countless television shows and movies, the process of getting your hands on a Birkin bag is an extremely dramatic and controversial process, which very few have found success. Getting your hands on the NFT (non-fungible token) version may cost even more—in the form of a lawsuit. Hermès International et al. v. Mason Rothschild is a recent case involving Hermès International, the luxury fashion house home to the iconic Birkin, and Mason Rothschild, an artist who created the “MetaBirkin,” an NFT meant to represent the Birkin bag.

The Case

The defendant Mason Rothschild created a digital image known as “MetaBirkins” which showed “a blurry faux fur covered Birkin handbag.” Rothschild sold the NFTs to buyers–each NFT representing sole ownership of a specific MetaBirkin. Hermès sued Rothschild for trademark infringement, trademark dilution, and cybersquatting. Hermès added an unfair competition claim to the mix by alleging that they had their own NFT product intended for use of business strategy which had been in the works for years.

Issues at Hand

Hermès v. Rothschild is one of the first lawsuits to cover the convergence of NFTs and trademarks and how to address them.  This is particularly important in establishing precedent on these matters.  Hermès has a range of trademark rights and trade dress rights over the Birkin which helped them protect their product over the years. They have registrations over the BIRKIN name/word mark, handbag design, and trade dress of the design.  The court decided to use the Rogers Test to assess trademark infringement on this case. The Rogers Test states that an artistically expressive use of a trademark may be protected by the First Amendment and, therefore, not considered trademark infringement. However, when assessing under the Rogers Test, the use of the MetaBirkin was found to be trademark infringement and not an artistically expressive use of the trademark.

Hermès made several claims regarding their product and argued on the grounds:

• Goodwill
  • Appropriation of the “Birkin Mark” diluted and damaged the distinctive quality and goodwill associated with the mark.
• Fame
  • Hermès counsel identified the BIRKIN trademark as “invaluable” to the brand and one of their main assets due to how well-known and easily recognizable the product is.
• Advertising Spend / Efforts
  • Millions of dollars a year are spent on advertising the BIRKIN trademark and Birkin trade dress, drawing special attention to the product and making it very memorable and recognizable to the public.
• Unsolicited Media / Attention
  • The BIRKIN receives lots of media attention unintentionally such as in U.S. films, television, media, and magazines, and through celebrity use.
• Investment Status
  • A Birkin has exceptionally good returns; it has better investment returns than the stock market and gold.

Another interesting aspect of this case is that Rothschild was originally sent a cease and desist by Hermès and proceeded to post it on social media, alleging that it was within his First Amendment rights to create art based on the world surrounding him, even if that legally belonged to someone else.

The Courts Decision

The court has sided with Hermès on this issue, reaffirming power for trademark ownership over NFTs in these situations. An 8-person civil jury ruled unanimously in favor of Hermès and found Rothschild liable on all trademark claims, dilution, and cybersquatting. Hermès was granted a permanent injunction, fully barring Rothschild from pursuing marketing on the Birkin related NFTs and barring use of the MetaBirkin domain. The jury found that Rothschild had intended to confuse his art with Hermès’ Birkin to “cash in on the Birkin name.” He had been found to be not a self-proclaimed “marketing king,” but instead “simply a swindler.”

The Future

The battle between Hermès and Rothschild is not yet over, despite the court’s ruling in Hermès’ favor and granting a permanent injunction. Rothschild is now filing an appeal to the U.S. Court of Appeals for the Second Circuit from the Opinion and Order dated June 23, 2023. Despite the previous ruling very strongly aligning on behalf of Hermès, counsel for Rothschild believes that an appeal is necessary. It seems likely that the arguments will be similar to claims he has made following the trial, which include that the court misstructured the jury and the jury “mishandled” and did not accurately consider First Amendment protections issues with their decision.[1]

Conclusion

This case established precedent, at least for now, in favor of brands having trademark rights over their products in the NFT world. Even when the court utilizes an artist friendly approach, trademark owners are still winning. Let us learn a lesson from Rothschild: if you cannot get a Birkin, don’t resort to cashing in on their name, or else you might find yourself in a lawsuit.

[1] TFL, Mason Rothschild Appeals Hermès’ win in MetaBirkins lawsuit, July 24, 2023, https://www.thefashionlaw.com/mason-rothschild-appeals-hermes-win-in-metabirkins-lawsuit-to-2nd-cir/ (last accessed August 8, 2023).