Nancy Chen is an IPilogue Writer and a 2L JD/MBA Candidate at the University of Toronto.
Imagine a Birkin bag – an iconic, timeless piece that arguably embodies luxury. Now make it digital, cover it in fur and sell it as a non-fungible token (NFT) called “MetaBirkin” for at least 3.8 Ethereum (about $6900 Canadian). Does this count as an artistic expression protected under First Amendment rights of expression and speech, or is it a trademark infringement upon a beloved fashion icon? This is the issue at the core of the ongoing Hermès v Mason Rothschild lawsuit.
Brief Timeline of the Lawsuit
January 14th, 2022 – Hermès files a complaint
Catching wind of the furry MetaBirkin NFTs, Hermès filed a trademark infringement and dilution lawsuit against Mason Rothschild, the creator. In their complaint, Hermès claims that the label “MetaBirkin” infringes upon their “BIRKIN” trademark and likely causes confusion in the minds of consumers that Rothschild’s products were “authorized, sponsored, or approved by Hermès.” Further details about this initial action can be found in our earlier article here.
February 9th, 2022 – Rothschild files motion to dismiss the action
Legal counsel for Rothschild maintained that the NFTs constituted protected expression under the test set out in Rogers v. Grimaldi, which held that the use of a famous trademark is protected from trademark infringement if 1) the name is “minimally artistically relevant” to the product and 2) that the use of the trademark does not explicitly mislead consumers as to source or content of the product.
Regarding the first prong, Rothschild’s counsel argued that the term “MetaBirkin” was minimally artistically relevant to his project of questioning the nature of luxury and value and bringing awareness to the prevalence of animal cruelty in the fashion industry. Regarding the second prong, Rothschild’s counsel pointed to the lack of explicit mention of Hermès in the advertising of the NFTs. Rothschild’s counsel further argued that the First Amendment right of speech and expression outweighs the “slight risk” of consumer confusion.
Hermès argued that Rothschild’s usage of “MetaBirkin” was akin to a trademark, namely to “brand a product line, and to attract public attention and signify source.” This form of use is outside the scope of First Amendment protection, making the Rogers test inapplicable.
May 18th, 2022 – Judge Radkoff denies Rothschild’s motion to dismiss
Judge Radkoff found that the Rogers test applied because the NFTs could constitute a form of artistic expression. Judge Radkoff found that “[because] NFTs are simply code pointing to where a digital image is located and authenticating the image, using NFTs to authenticate an image and allow for tradeable subsequent resale and transfer does not make the image a commodity without First Amendment protection.”
However, the motion was ultimately denied because the Hermès had filed adequate evidence (such as Rothschild’s statements in public interviews) to support the allegation that the label was artistically relevant and explicitly misleading to consumers. Rothschild appealed this decision, which was subsequently dismissed on September 30th 2022.
October 8th, 2022 – Hermès files a motion for summary judgement
In a newly filed motion, the fashion giant pushes for the application of the Gruner test instead of the Rogers test, which asks: 1) whether the plaintiff’s mark (“BIRKIN”) is entitled to protection and 2) whether the defendant’s use of the mark (“MetaBirkin”) is likely to cause consumer confusion. Hermès argues that Gruner is the appropriate test given the recent development of “undisputable facts” that pushes the First Amendment considerations out of the question.
The facts that Hermès points to include: the similarity between the parties’ marks, evidence of actual confusion amongst consumers, and the fact that both parties are selling the same product, albeit in different universes. Counsel for Hermès claims that a summary judgment on the action should be granted due to the clear and undisputed nature of the material facts.
The Big Picture
All eyes are on the court as they navigate this new digital terrain and attempt to balance the freedom rights of creators against the IP rights of consumer brands. As Mr. Dan Bereskin emphasized in his IP Osgoode Speaks presentation earlier this year, an IP owner’s rights should not go unchecked for fear of imposing a “chilling effect” on artists’ creative freedoms. On the other hand, the metaverse presents a new avenue for trademark infringement that is difficult to police, given the ever-evolving digital landscape. Hopefully, the continuing battle between Hermès and Rothschild will provide some guidance about the legal relationship between brands and creators in this new digital world.
