[Asia Economy Reporter Jeong Hyunjin] The French luxury brand Herm?s officially began its trademark infringement lawsuit on the 30th (local time) against digital artist Mason Rothschild, who created the brand’s core product, the Birkin bag, as a non-fungible token (NFT). Herm?s claims that its trademark was improperly used, but Rothschild counters that it is an "artwork" protected under the First Amendment of the U.S. Constitution.
Depending on the outcome of this trial, it is expected that similar lawsuits between famous brands and NFT creators currently underway will flood courts worldwide.
◆ "Consumer Confusion" VS "Just an Artwork"
What Herm?s took issue with was Rothschild’s "MetaBirkin NFT," unveiled at the end of 2021 at the world’s largest art fair, Miami Art Basel. MetaBirkin is an NFT with the exact same design as Herm?s’ Birkin bag, but covered with fur. While most Birkin bags are made of leather, this NFT is characterized by being covered in brightly colored fur. The Wall Street Journal (WSJ) reported that this NFT was even sold at prices similar to actual Birkin bags.
In January last year, Herm?s filed a trademark infringement lawsuit against Rothschild in the U.S. District Court for the Southern District of New York. According to Bloomberg and other sources, Herm?s argued that Rothschild’s inclusion of "Birkin" in the NFT project name constituted improper use of the trademark. Herm?s pointed out that by using this name on social media and in media reports, consumers might be misled into believing that Herm?s created or approved the MetaBirkin.
Herm?s further claimed that in recent years, fashion brands such as Louis Vuitton, Gucci, and Nike have successively launched their own NFTs, and that there is a possibility of misunderstanding that Herm?s also joined this trend by releasing NFTs using its own Birkin bag.
However, Rothschild rebutted that the MetaBirkin NFT is an artwork and therefore not problematic. He stated that the 100 MetaBirkin NFTs he created serve as works explaining how contemporary society assigns artistic value to high-priced products symbolizing high social status. He added that it was a critical commentary on Herm?s’ practice of animal cruelty in making expensive leather bags.
In a rebuttal posted on the MetaBirkin Instagram account in January last year, Rothschild explained that, like the iconic pop art work "Campbell’s Soup" by American artist Andy Warhol, which is not a product, his work falls under the First Amendment. He also argued that just because he releases and sells his work as NFTs does not mean the work is not art.
◆ Will This Be a Test Case for NFT Lawsuits?
However, in May last year, the U.S. District Court for the Southern District of New York dismissed Rothschild’s motion to dismiss Herm?s’ lawsuit. Judge Jed Rakoff, who presided over the case, did not fully accept Herm?s’ claims but found Herm?s’ argument that the name MetaBirkin explicitly causes confusion to be appropriate regardless of whether MetaBirkin can be considered an artwork. Nevertheless, he positively evaluated that the digital image of a handbag can be a form of artistic expression and that NFTs may be protected under the First Amendment.
Political media outlet Politico reported that a jury verdict related to this matter would be delivered before Judge Rakoff on the same day.
The WSJ, citing legal experts, assessed that this trial would serve as an important early test to determine how companies can exercise rights over unauthorized virtual assets. Global sports brand Nike is currently suing online reseller StockX for selling Nike NFTs without permission. American film production company Miramax engaged in a dispute over the NFT copyright of the movie "Pulp Fiction" with famous director Quentin Tarantino, but the parties reached a settlement without proceeding to litigation.
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