Hermès Gets a Win in Trademark Infringement Lawsuit Against Rothschild MetaBirkin NFTs

A jury of nine in the Southern District of New York decided in favor of luxury fashion brand Hermès in the recent trademark infringement case involving MetaBirkin NFT’s, Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY). 

Hermès’ Win Against MetaBirkin NFTs Sets Precedent on NFT Trademark Infringement

MetaBirkin NFT creator and artist, Mason Rothschild, maintained that his adoption and use of the “MetaBirkins” name was “protected free speech under the First Amendment because the MetaBirkins artworks and associated NFTs are art and commentary on Hermès’ Birkin handbag,” and therefore, did not constitute infringement, dilution, or cybersquatting.

The jury disagreed, apparently swayed by Hermès’ arguments that offering virtual goods of the same goods sold in the real world is within its “natural zone of expansion,” particularly given that “fashion brands have entered and are continuing to grow in the metaverse.”

Hermès Testified Having Plans for Own Virtual Birkin Bag NFT

It should not be overlooked that during discovery and the trial Hermès had testified on its own plans for web3 ventures, including the virtual Birkin bag prototype that it created back in 2021 and its potential use of blockchain technology to aid in authentication efforts. This testimony may have helped prove natural zone of expansion.  And now, Hermès can proceed with plans for its own virtual bags without Rothschild’s MetaBirkin NFTs posing a prevalent concern for consumer confusion.

What Does the Win Over MetaBirkin NFTs Mean?

The court has not yet ruled on injunctive relief, but Hermès was awarded $133,000 in damages for intellectual property infringement, cybersquatting, or using a domain name similar to that of Hermès.

The lawsuit outcome is likely to strengthen brand owners’ right to control the use of their trademarks in the metaverse.  This can be seen as an overall win for brand owners seeking to enforce rights in virtual space.

What Can Brand Owners Do to Proactively Avoid a Hermès/MetaBirkin NFT Scenario?

Brand owners should consider filing intent-to-use trademark applications, which can reserve priority for over 3 years, allowing businesses time to craft and implement their plan to enter the metaverse space, while putting third parties on notice of their rights.  Such applications could create priority rights and help prevent more costly enforcement measures. 

Brands like Balenciaga to Nike Inc. have already announced plans to expand into NFTs and the metaverse.

Key Takeaways on Hermès’ Battle Against MetaBirkin NFT Creator

The decision giving Hermès a win over Rothschild’s MetaBirkin NFTs is significant and brand owners can learn lessons from the battle because:

• The win indicates trademark protection is afforded to “virtual goods” that are rooted in “real world” rights, and that those rights can serve as a basis for a successful trademark infringement and dilution action;

• It shows that if your business operates in the consumer goods space, you should have a web3 market strategy, including considering filing trademarks in the relevant digital classes to protect against infringement in virtual space; and

• For optimal protection, brand owners should consider a monitoring strategy to help ensure awareness of the activity happening in web3 now, in its current state, and as it expands.

For more information about trademark litigation, see our Trademarks, IP Litigation, and Industry Focused Legal Solutions pages.