NFT artist to pay Hermès $133K in damages over trademark infringement

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Digital artist Mason Rothschild has been ordered to pay luxury brand Hermès $133,000 in total damages for trademark infringement.

Hermès filed a lawsuit against Rothschild in January last year after the artist released an NFT collection based on the Birkin line called MetaBirkins. The NFTs resemble the physical Birkin bags, but the digital ones are covered in bright-colored fur.

The trial began on January 30, 2023, in a New York federal court. Hermès accused the artist of “stealing the goodwill in Hermès’ famed intellectual property to construct and sell his own range of items.”

Hermès attorney Oren Warshavsky explained that the NFT collection violated the Birkin trademark and misled customers into thinking it was affiliated with the luxury brand.

On the other hand, Rothschild’s side argued that his artworks were under the protection of the First Amendment, adding that they were an “artistic experiment” that aimed to explore how society regarded status symbols like luxury items.

While Rothschild did introduced the display as a “digital homage” to Birkin, he later clarified on his website that the collectibles were not affiliated with the brand.

Nevertheless, Hermès did not consider his disclaimer on the website sufficient and sued Rothschild because he did not comply with the brand’s terms and conditions.

In addition to monetary compensation, Hermès asked the jury to prohibit Rothschild from using any of the brand’s trademarks in the future.

Judge Jed S. Rakoff, who presided over the case, eventually ruled that the Los Angeles-based artist’s digital collections were “closely connected” to the trademarked Birkin line.

MetaBirkins were sold for around $450 each, but the resale price jumped to tens of thousands due to its popularity. According to a blockchain specialist at the trial, Rothschild generated 55.2 Ethereum — around $87,700 by today’s value — from MetaBirkins.

Rothschild’s loss may affect future cases

Analysts believe the Hermès vs. Rothschild case is important for the NFT industry because it is the first trial investigating NFTs as intellectual properties (IPs). Similar cases in the future will likely refer back to the ruling of this case.

“Hermès’ lawsuit against Rothschild will undoubtedly set the stage for how intellectual property is applied to the world of digital assets and NFTs,” Ohio-based IP attorney Andrew Rossow said.

“As more luxury brands enter into the metaverse and launch their respective NFT projects, courts will be required to weigh in on the confines and parameters of what it means to introduce originality while balancing artistic expression and the right to create.”

Luxury brands using NFTs for marketing

Several luxury brands have begun using NFTs for marketing purposes. Earlier this month, Prada launched its ninth Timecapsule NFT collection. The collection features physical and digital shirts designed based on photographer Enzo Ragazzini’s 1970s archive.

Any holder of Prada’s NFT collection will get a special pass to the Prada Crypted NFT community, which comes with several perks. For example, one member of the community can attend the brand’s Womenswear Fall/Winter fashion show this month.

Last January, French luxury fashion brand Yves Saint Laurent filed NFT and metaverse trademark applications. Before that, Rolex and Mercedes Benz also applied for trademarks.