The thing about the industry for non-fungible tokens is that things can get pretty messy. You see, although there are a lot of great benefits and even a lot more money to make with NFTs… there’s a downside. NFTs are not currently governed by any specific governmental laws and regulations. We’re talking about things like copyright infringement, trademarking, fraud, or even NFT scams. All of this brings us to the topic of the moment: the MetaBirkins Hermes NFT trial!
So, things got pretty messy and tangled when an NFT collection launched a digital rendering of fur-covered Birkin bags. Mason Rothschild launched the collection in November 2021 after listing them on OpenSea. The starting price for the MetaBirkins was 0.1 ETH – approximately $450 at the time of their release. Rothschild is the founder of Gasoline XYZ – a disruptive, creative studio specializing in web3 solutions. And, he is also the co-founder of the fashion boutique Terminal, with locations in Los Angeles and Tokyo.
A year ago, the Parisian fashion house filed the very first NFT lawsuit against the MetaBirkins. This was the first test of boundaries of trademark law, art, and commerce in the metaverse, and the First Amendment. Let’s get into more details about the suit. But, before…
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MetaBirkins NFT Trial
MetaBirkins NFT TrialSo, naturally, Hermes was not happy about the MetaBirkins NFT collection. On December 16, 2021, the French Maison hit the digital artist with a cease and desist. In turn, Rothschild hit back with a motion to dismiss. Here’s what Rothschild had to say in reply,
“Each of the 100 works in Rothschild’s ‘MetaBirkins’ series is a unique, fanciful interpretation of a Birkin bag,” a preliminary statement from Rothschild read. “These images, and the NFTs that authenticate them, are not handbags; they carry nothing but meaning. Hermès asks this Court to suppress Rothschild’s art and to restrain his protected speech in the service of protecting Hermès’ commercial interest in its trademarks.”
For Hermes, the MetaBirkins NFT collection was just a straight-up rip-off.
By January 2022, OpenSea and other NFT platforms removed the collection from their sites. However, this was after Rothschild sold over $1 million worth of NFT handbags. This part of NFT fashion is not something you would want to be caught up in.
The Verdict
Earlier this month, a jury in a federal court in Manhattan found Rothschild liable for: trademark infringement, trademark dilution, and cybersquatting, and deemed that the First Amendment offered him no protection. Ouch!
The financial consequences of the MetaBirkins NFT collection came out to: $23,000 in damages for cybersquatting and $11,000 in the net profits he earned. Cybersquatting is the (bad-faith) act of using another person or brand’s trademark in a domain name.
Note: you should know that there was no evidence that any consumer of the MetaBirkins NFT collection thought these were Hermes. This is because Rothschild clearly presented them as drawings he had made. He also provided disclaimers that they are not affiliated with Hermes.
But, Hermes still won the NFT lawsuit! And this move will definitely set precedent for future NFT lawsuits and even rules governing the Metaverse and Web3 scene. Basically, the moral of the story is, don’t get “inspired” by someone else’s design too much.