Hermès International, et al. v. Rothschild

Trademark

Jul 15

Overview

Filed January 14, 2022 in the Federal District Court for the Southern District of New York.

Summary: Mason Rothschild created an NFT project called MetaBirkins in which each of 100 NFTs depicts one of Hermès’ famous Birkin handbags. Hermès sells those handbags for thousands of dollars and owns trademarks in the handbag’s name and trade dress. Hermès sued Rothschild for trademark infringement and related claims. Rotshchild claims the First Amendment protects his right to produce art as NFTs.

Status: Rothschild moved to dismiss the case based on First Amendment freedoms, but the court denied the motion on May 5, 2022. On June 6, 2022, Rothschild asked the court for the ability to appeal the court’s denial. The court denied Rothschild’s motion on October 5, 2022, ruling that the case wasn’t “an exceptional case that warrants immediate appellate review.” The parties both moved for summary judgment, but on December 30, 2022, the judge denied both motions.

Trial started on January 30, 2023, and a verdict was rendered on February 8, 2023, with the jury finding for Hermes on all three claims (trademark infringement, trademark dilution, and cybersquatting), finding that Rothschild had no First Amendment defense, and awarding Hermes $110,000 in trademark infringement/dilution damages and $23,000 in cybersquatting damages.

On June 23, 2023, the judge largely granted Hermes’ motion for permanent injunction, including requiring Rothschild to transfer the domain metabirkins.com and any future income from Metabirkins to Hermes. The judge also denied Rothschild motion for judgment as a matter of law (or for new trial) and motion to interview the jury. Rothschild notified the court on July 21 that it was appealing to the Second Circuit.

Bottom Line: This is the first major case pitting freedom of expression against established trademark rights in the NFT world. The jury’s verdict showed that it wasn’t swayed by Rothschild’s First Amendment arguments. That doesn’t mean, however, that Rothschild’s NFTs aren’t considered art, or that no art can use trademarks—only that, in this case, the jury found that consumers were (1) likely to be confused and (2) the NFTs’ use of Hermes’ trademarks was not artistically relevant and/or was explicitly misleading. We can probably expect Rothschild to appeal the verdict.