Hermès Wins Lawsuit
Over NFT Birkins.
NFTs aren’t “speech”
The luxury fashion brand Hermès has won a lawsuit against artist Mason Rothschild, who produced non-fungible tokens (NFTs) he called “MetaBirkins.”
As the New York Times reported,
a nine-person federal jury in Manhattan determined that Rothschild had infringed on the company’s trademark rights and awarded Hermès $133,000 in total damages. The jurors also found that his NFTs were not protected speech.
As we discussed in this earlier blog,
An NFT is an asset verified using blockchain technology, in which a network of computers records transactions and gives buyers proof of authenticity and ownership.
An NFT is analogous to a receipt, a deed to a house, or a pink slip for a car – rather than to conventional intellectual property (IP) like a patent, trademark, or copyright.
However, artwork related to an NFT can be protected as IP, and an NFT can infringe the IP on which it’s based – as in this case
(Yes, we know that’s confusing…)
A Birkin bag (shown above) is a very expensive purse with a distinctive shape, made out of exotic skins like crocodile, ostrich, and alligator. The bag’s hardware is plated gold or palladium. Bags sell from $8,500 to $300,000 new.
Vintage Birkin bags are also highly valued, and their sales price increased 42% at auction from 2019 to 2020. In 2021, the auction house Sotheby’s sold a Birkin for more than $226,000.
“Birkin” is an Hermès trademark. As the Times notes,
Birkin bags, named after the actress Jane Birkin, are made by hand and take specialized artisans a minimum of 18 hours to make. Hermès does not disclose how many of the bags it has made since they were first created in 1984, but some researchers of luxury goods have estimated that there are now more than a million Birkins in the market.
Sales of Birkin bags generate about $100 million per year.
However, as Madison Avenue Couture notes,
One cannot simply walk into an Hermès boutique and purchase a Birkin. It requires becoming a regular customer of a boutique, and building and maintaining a “profile” — a history of purchases from the brand across many of Hermès product categories, such as shoes, scarves, ready-to-wear, and home goods. Therefore, the listed retail prices of Birkins belie the “all in” price of the bag, which could be double or triple the list price. Amazingly, even after creating a profile of multiple purchases, you are not guaranteed that you can purchase the Birkin in the size, color, leather, or hardware of your choice.
As The Guardian reported,
Rothschild portrayed the bags in 100 whimsical pieces showing purses covered in rainbow-colored shag fur or in green fur, wearing a red Santa cap.
Rothschild (whose real name is Sonny Estival) claimed that his NFT art based on the bags was comparable to Andy Warhol’s silk screens of Campbell’s soup cans — an absurdist comment on the excesses of the fashion world.
Art critic Blake Gopnik favorably compared the MetaBirkins to artwork by both Andy Warhol and Damien Hirst.
Hermès contended that its trademark was being diluted and that potential consumers might be fooled into buying the unaffiliated MetaBirkin NFTs, thinking they were created by Hermès.
As the Times noted, “up for debate was whether NFTs or nonfungible tokens are strictly commodities or art shielded by the First Amendment.”
The Times concluded:
Rothschild’s defeat was a major blow to the NFT market, which has often described itself as part of the creator economy. But the jury determined that MetaBirkins were more similar to commodities, which are subject to strict trademark laws that prevent copycats, than to artworks where appropriation is protected.
Just like the haiku above, we like to keep our posts short and sweet. Hopefully, you found this bite-sized information helpful.
