The Hermès vs. Mason Rothschild case: Trademark infringement?

The case that has had a lot of repercussions in the American media is about an issue related to “NFTs” (non-fungible tokens) called “MetaBirkins”.

The tokens, produced and marketed by Mason Rothschild, are a collection for the metaverse of 100 Birkin bags covered in fur and with “exclusive” designs. Birkin bags are a Hermès creation that, over the years, have become a symbol of status, exclusivity, and wealth in the hands of those fascinated by fashion.

As a result, the French brand Hermès filed a lawsuit in January 2022, seeking injunctive relief with damages, against Mason Rothschild for unlawful use of Hermès’ HERMÈS trademark, BIRKIN trademark and BIRKIN visual identity. In May, Rothschild requested that the case be dismissed, which was denied, and the prosecution then proceeded. The suit addresses issues such as trademark infringement, unfair competition, dilution, and cybersquatting. The arguments supporting the dilution charge are based on the strength and exclusivity of the Birkin mark, bad faith on the part of Rothschild, and the occurrence of actual confusion among consumers. In addition, the indictment says that Rothschild is trying to make a profit while replacing real-life protections with “virtual rights” and capitalizing on a brand that already has its own consolidated history and clientele in the marketplace.

On the other hand, the defendant claims that the sale and promotion of the MetaBirkins was an artistic project and not a commercial activity. His lawyer is arguing that MetaBirkin is creative expression protected by freedom of speech. The argument about the confusion generated by the nomenclature is based on the idea that the use of the term “Meta” would have meant an artistic commentary on the luxury handbag, and that the term “Birkin” in this case would have made no claim on the source and was insufficient to justify its restriction of use. The artist even claims that the works were nothing more than a form of criticism of the unreasonably expensive price charged for handbags that are made of animal leather in the real world, while also addressing a form of revulsion to animal cruelty. It will also be alleged that the sale of the MetaBirkins was corresponding to a form of expression of the Birkins and not an attempt at brand affiliation. Finally, the defense will rely on evidence that Rothschild always made a point of informing consumers that he was the one producing the works, as well as providing a disclaimer on his website.

The jury will conduct a test to check whether the situation creates the consumer confusion claimed by the brand. This test is known as the “Polaroid Test” and takes into account factors such as brand strength, brand similarity, competitive and qualitative proximity of the products, evidence of actual confusion, bad faith in adopting someone else’s brand, among others.

Hermès, with its almost 200 years of history, promises evidences that favor it in all senses of the Polaroid test, through documents, proofs, and terms that prove its performance in the market and its quality as a differential. In addition, the brand also argues that the pairing of the term “Meta” with the brand “Birkin” ends up bringing the false impression that Hermès itself is offering products in the metaverse. In addition, evidence will be attached that the brand team was already studying the idea of developing and marketing NFTs since 2019.

The debate that is brought up here, has also had landmark appearances in history, such as in the Gordon X Drape Creative, Inc. You have to think about in what situations and under what circumstances it is considered legal to use trademarks in artistic expressions. It is worth noting that Rothschild even registered the trademark “MetaBirkins.com” in 2021, while the Birkin trademark was registered in 2005.

Intellectual Property (IP) is an area of law that has a direct relationship with digital assets and NFTs. Besides the lawsuit in question, we can mention cases like Nike X StockX, which also brings IP to the fore with the entry of luxury brands into the metaverse and production of their NFTs. With these advances, the Law will adapt and generate more and more precedents regarding the debate between originality, artistic expression, and copyright.

If you have doubts about Intellectual Property, consult the specialized lawyers at PDK Advogados.

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