Outcome of Hermès Claim Against MetaBirkin NFT Could Give Glimpse of Future of Fashion and Art in the Metaverse | International network of lawyers

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Hermès recently sued a digital artist for having his Birkin handbag dropped by issuing non-fungible tokens MetaBirkin (“NFT”). For those unaware of the filing or related media attention, the artist created blurry images of the Hermes Birkin handbag and minted them as NFT.

NFTs are digital records of data stored on a blockchain and uniquely identifiable. NFTs are associated with a larger digital file that is itself too large to be stored on a blockchain. The digital recording can then be traded or sold as an asset identifying the owner of the NFT as the true owner of the original digital file.

The use of NFTs has, in part, allowed digital artists to attach ownership to an original version of their art through the NFT that can be monetized much like the physical paintings or sculptures of artists creating on physical media. .

The artist in the Hermès lawsuit branded his images MetaBirkins and is attempting to sell them on various websites using MetaBirkins as a brand name. Hermès is suing the artist for trademark infringement, trademark dilution and cybersquatting. Hermes based its allegations of trademark infringement and dilution on the artist’s use of MetaBirkin as a trademark to promote its NFTs and to its metabirkin.com website.

A quick review of the complaint may lead to the conclusion that the artist is in line for a swift reprimand, but under established trademark law, Hermès’ success is not a given.

The Hermès lawsuit raises all sorts of questions for brand owners, artists, and indeed almost every business owner about intellectual property rights in emerging technologies, whether it’s the metaverse, NFT or other means of expression that have not yet been conceived.

Basically, the images and related NFTs are expressive works with wide latitude to avoid trademark infringement findings under the second circuit test in Rogers vs. Grimaldi, 875 F.2d 994 (2d Cir. 1989). According to this series of cases, the use of a trademark in the title of an artistic expression constitutes trademark infringement only if the title has no artistic relevance to the underlying work or explicitly induces the misleading consumers as to the source or content of the work. The underlying work itself is broadly protected by the First Amendment as expressive art.

Moreover, even if roger does not apply, Hermès trademarks relate to leather goods, in particular handbags. The NFTs sold are definitely not leather goods. Generally, trademarks apply only to the goods or services listed on the records and to those reasonably related to the listed goods or services. Hermès will have to prove that its leather goods brand extends to expressive images based on leather goods, which is what the MetaBirkin brand sells to consumers.

To succeed in a trademark infringement action, the conduct of the alleged infringer must create a risk of confusion for the consumer. Whether Hermès can demonstrate that consumers will confuse Hermès and its handbags with digital images of handbags altered using MetaBirkin is an open question – and it will be interesting to see how the court resolves the issue. .

According to Mason Rothschild, creator of the MetaBirkin NFT and named defendant in Hermès’ lawsuit, he is exercising his First Amendment rights – just like Andy Warhol did when he created his famous Campbell’s Soup Cans in the early 1960s.

But what does all this NFT talk mean for a business owner?

First, if your business wants to join the NFT market, it would be a good idea to update all brands currently in use to include NFTs as products. This can be done by filing an intent to use request if you are not ready to enter the digital realm immediately.

Second, be on the lookout for competitors and opportunists who invalidate your design patents, goods and services, or cause consumer confusion.

Third, be careful when creating NFTs. The rules of copyright and right of publicity apply to the use of works of third parties. As stated in the Hermès lawsuit, trademark rules may apply depending on the circumstances. Design patents may also apply depending on the goods and circumstances.

Finally, properly protecting your NFTs requires contracts with specific terms regarding minting, royalty rights, and intellectual property. Ownership disputes over who owns the NFT and/or underlying work will only increase soon, as demonstrated by Miramax’s fight with Quentin Tarantino over “Pulp Fiction” NFTs.

NFTs allow brands to connect directly with consumers using new technologies. Consumers and brands can interact with each other in brand-specific environments through the decentralized metaverse. Artists and creators can monetize ownership of their digital creations.

This emerging technology is a powerful tool that, if used correctly, can strengthen the bonds between brands/artists and consumers. However, technology and the decentralized nature of NFTs have evolved the breadth and scope of existing intellectual property rights. Before venturing into this new world, it’s best to fully understand what you’re getting into, so you don’t get lost in the void.

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