“The new logo has a heavier, bold look with a geometric sans-serif treatment.” This is what Bloomberg’s Rob Walker wrote about the newly redesigned Burberry logo. He could, however, actually be discussing any number of recently (and relatively recently) revamped logos – from Balenciaga and Berluti to Saint Laurent and Rimowa. As part of a larger trend in branding, or better yet, blanding, a growing number of high fashion and luxury brands – and other consumer goods and tech companies, as well – are looking to spartan logos, which are “designed not to stand out at all, but to blend in.”

Logos meant to blend in? That is an interesting notion if you consider the practical purpose of branding in the first place. Trademarks – i.e., brand names, logos, and even colors in some cases – have traditionally been used and have derived their value from their ability to enable consumers to easily identify the source of a product and distinguish that product from those of other companies. Given the increasing number of brands contributing to the mass-simplification of logos, it is worth wondering what, exactly, this means, legally speaking, how we got here, and what the broader cultural implications might be.

Trademark Considerations

From a legal perspective, one of the key concerns when it comes to rebranding is the potential loss of trademark rights in a prior logo or specified stylization of a word mark. After all, trademark rights are amassed and maintained in many jurisdictions, including the U.S., as a result of actual – and consistent – use of a mark. As such, discontinued use of a stylized brand name or logo could give rise to complications even when a brand maintains registrations for such marks.

A chart of logos before and after their blanding makeover

This issue is “particularly relevant if that previously-held logo was used for an extended duration, and was recognized and beloved by consumers,” as Sterne Kessler’s Ivy Estoesta and Monica Talley have noted. “At issue in such a scenario will be the need to establish trademark rights and consumer recognition from scratch in a new logo, which will take time and resources, and will also require ensuring that the new logo does not infringe any other parties’ already-existing marks.”

As such, “Companies that wish to refresh their branding but benefit from the goodwill surrounding a prior mark should consider modifications that update – but do not completely change – the commercial impression of the brand.” In such a scenario, “a brand owner may be able to rely on the doctrine of ‘tacking’ in a later procurement or infringement matter, which allows a trademark user to ‘clothe a new mark with the priority position of an older mark.'” While this “sounds simple in theory,” Estoesta and Talley caution brands, noting that the application of the doctrine “is more challenging because the determination of legal equivalency depends on whether the two marks ‘create the same, continuing commercial impression such that the consumer would consider them both the same mark,’ as the Federal Circuit stated in In re Dial-A-Mattress Operating Corp.

At the same time, it could be argued that brands actually stand to increase the strength of – and the scope of protection for – their marks by adopting this less-is-more approach. As London-based intellectual property lawyer Birgit Clark told TFL, a brand “should always try to register a plain word trademark.” That way, she says, the distinctiveness of the mark “will rest on the word(s) rather than any stylization of those words.”

With that in mind, brands will be able to “go after similar or identical trademarks in any kind of stylization or in combination with a logo,” for example, as opposed to merely being able to claim infringement if the name and any decorative elements are similar. In short: the more distinctive a trademark, itself, is, the wider its scope of protection will be. From this standpoint, the new trend of bland logos bodes well for brands.

“Just Good Business”

Speaking more broadly, there is something to be said about the simplification of logos, a move that has largely been attributed to the desire of brands to use the same logo more seamlessly across multiple format – i.e., on Instagram, billboards, and shopping bags, etc., alike. In this way, creative director Thierry Brunfaut wrote for Fast Co., the adoption of bare bones branding “is just good business.”

The widespread adoption of newly sans-serif-centric logos is also likely due (at least in part) to the reliance of the same handful of individuals’ or companies and their aesthetics. Famed graphic designer Peter Saville, for instance, created both Calvin Klein and Burberry’s new logos and related branding. German creative firm Bureau Borsche was responsible for Balenciaga and Rimowa’s rebrands, as well as recent bland-centric revamps for menswear site Highsnobiety and Nike. The list of commonalities goes on, just as it does elsewhere in fashion.

Blanded logos

Beyond that, the uniformity in design is part of the larger approach to modern fashion, which is becoming more formulaic, corporate, and spread sheet-driven. Because a sizable number of fashion brands are owned by publicly-listed parent companies, the stakes, from a bottom line perspective are higher, and as a result, they tend to be increasingly risk averse. Thus, much of what they produce – from garments to branding – is the product of trend forecasting and careful metrics.

As for the trend, itself, it speaks to the larger state of things in consumer goods sales, as well. After all, consumers – particularly high fashion ones – are not necessarily shopping in the same way as they used to. The rise in omni-channel operations calls for  is a “tremendous design challenge,” per Brunfaut, and as such, brands have opted for the straightforward, easily-transferrable and super-scalable logo.

More than that, an ever-growing percentage of luxury goods sales, for instance, are occurring online, where labeling tends to be clearer than it is in multi-brand stores, and this has had a practical impact on the need for – and the utilization of – logos.  Look no further than the Saint Laurent Sac De Jour bags being offered up by Net-a-Porter. They have the simplified (under the direction of Hedi Slimane) Saint Laurent logo on them. The bags are also being sold under a bold Saint Laurent brand identification tag on the website.

This is demonstrative of the fact that the practical need for a super easily-identifiable logo on a bag, itself, is in the digital era is arguably less intense than when consumers were shopping in brick-and-mortar department stores. Whether that means brands should continue to opt for logos that look very much alike, all more-or-less blend together, and potentially, fail to distinguish one brand’s products from another’s (even if that is less likely than in generations prior), that seems like a negative.

This article was initially published on December 19, 2018.

Hermès made headlines last month in the wake of filing a trio of intent-to-use trademark applications, seeking to register its name, along with the Birkin and Kelly word marks, across a number of quintessential metaverse classes of goods/services – namely, Classes 9, 35, and 41 for the two famed handbag style names and a longer list (Classes 9, 35, 36, 41, and 42) for the Hermès word mark. The filings that counsel for Hermès lodged with the U.S. Patent and Trademark Office come as the French luxury goods company is embroiled in a trademark lawsuit against Mason Rothschild, which it lodged early this year over his sale of a collection of 100 “MetaBirkins” non-fungible tokens (“NFTs”) tied to images depicting furry renderings of its famous Birkin bag. 

At the same time, the Hermès applications fall neatly in line with an overarching trend among brands – mass-market entities and luxury goods purveyors, alike – that have filed similar applications for registration with the USPTO and other trademark offices, often in an effort to hedge their bets when it comes to the budding rise of the metaverse and new technologies like NFTs. How can we tell that brands are hedging by way of these applications? Look no further than the disparate classes they are filing for, which illustrate, among other things, that they are not quite sure what they are going to do in the metaverse – if anything at all. 

By intentionally casting a wide net, listing goods/services that range from metaverse-centric entertainment services to technologies for crypto payments, companies are both following the lead – and the language – of early-moving parties (such as Nike) and looking to cover their bases for their future endeavors in this realm, even if they do not know exactly what those endeavors will look like. 

Hermès' application for its metaverse trademark
An excerpt from Hermès’ application

It is difficult (for me) to imagine Hermès rolling out a metaverse venture – such as a partnership with platforms like Roblox or Mythical Games’s Blankos Block Party as Burberry and Gucci have done – any time soon. (The company has not even fully embraced e-commerce, announcing just two years ago that it was “going to gradually increase our offer of products online.”) And despite many media reports to the contrary, the applications that the Birkin bag-maker filed, on their own, do not necessarily mean that it has concrete plans to make inroads into the virtual world. Nonetheless, a discussion about some of the takeaways from the Hermès applications is still worthwhile, particularly as at least a couple of points stand out.

Authentication Over the Metaverse

Primarily, it is worth noting that in its application for its name, Hermès includes Class 42, specifically pointing to “authentication, issuance and validation of digital certificates; user authentication services using technology for e-commerce transactions; [and] providing user authentication services using blockchain-based software technology for cryptocurrency transactions,” as among the services it might use its name on. While it is interesting that Hermès (and other companies, such as Dior, Bulgari, Versace, Saint Laurent, Canada Goose, etc.) goes beyond that most commonly-cited metaverse/NFT classes (9, 35, and 41) in its application, it is not necessarily surprising, as it would be far less of a stretch (I think) to see Hermès and other similarly-situated ultra-luxury brands make use of web3 technology more as a way to provide customers with information about their purchases, including on the authentication front, than as part of a metaverse/gaming-centric scenario. 

“The most obvious use case of tokenization,” according to fashion and luxury-focused NFT platform Arianee, comes in the form of digital product passports or digital twins that are tied to “real-world assets,” such as luxury handbags or watches, and that can provide “proof of ownership and authenticity by way of an NFT-centric watermarking system.” The benefits here go further, as such digital twins “follow the [corresponding physical] products throughout their lifespan,” and can capture/store information along the way, including in the event that the physical goods are resold and/or repaired or otherwise modified.  

An example of how NFTs could be used to share information about a car
An example of how NFTs can store information about car sales and service (courtesy of Chainlink)

The use of NFTs in this way makes sense for luxury brands – especially craftsmanship-focused ones that maintain closely-controlled distribution systems and offer up investment-grade offerings – for a number of reasons. For one thing, no shortage of these brands are placing increased weight on repairs as a way to deepening their connection with clients (and potentially, justifying repeated price increases). Management for LVMH, for instance, recently rejected the idea of participating in the resale market and instead, “emphasized efforts to offer repair services for its products.” At the same time, Chanel – which has famously snubbed the secondary market – has filed trademark applications for registration of the past couple of years that shed light on its increasing efforts on the repair front. 

Beyond that, accurate and up-to-date repair records are important, as TFL has reported in the past, in light of the strict stance that many ultra-luxury brands take in terms of the impact that modifications of their goods can have on the authenticity of those products. (As Chanel, for instance, states in connection with its repair/restoration services, “Only the House of CHANEL can offer the appropriate care ritual respecting the authenticity of each creation.” Meanwhile, luxury watchmakers largely treat previously authentic watches that have been modified to include unauthorized parts as inauthentic, which has led to a stream of lawsuits filed by watchmakers and secondary market watch buyers, alike.) 

In theory, careful and consistent tracking of modifications could help to alleviate some concerns that brands/consumers have about the authenticity of altered goods, and thus, help to avoid litigation and/or more accurately determine the value of products from a secondary market perspective. 

And still yet, this information is useful from a warranty perspective, as certain alterations/modifications serve to void warranties (such as for Rolex), while certain conditions of sale are relevant for warranty purposes. Chanel, for example, offers a five-year warranty exclusively for handbags and wallets on chain that have been acquired from its boutiques beginning in April 2021. 

Token-Gated Benefits

The second thing that stands out in Hermès’ filing is the following language – “Creating an online community for registered users to participate in discussions, form virtual communities, and engage in social networking in the field of digital assets” – which also comes by way of Class 42. Is Hermès likely to launch a social media platform for its clients to network? Probably not. However, this seems like it could be a nod to the ability of brands like Hermès to use web3 tech to “reinvent their customer relationship management practices,” according to Arianee, with NFTs, for instance, capable of functioning as digital membership cards that provide consumers with access to “exclusive communities, events, sales, drops, or time-based privileges.” 

Hermès' application for its "Birkin" trademark for use in the metaverse

Such a token-gated approach (by which brands can provide exclusive offers/benefits to token holders) could be especially relevant for companies like Hermès to use in connection with their most coveted offerings. After all, in theory, if an individual has acquired a Birkin or Kelly from an Hermès boutique, it generally means that they have purchased no small number of other Hermès offerings and thus, are the very type of client that the brand would be interested in consistently engaging with. (As distinct from the longstanding narrative about the near-impossibility of “bagging a Birkin,” consumers can get their hands on Hermes’ most prized handbags if they spend enough on the brand’s other offerings (i.e., homewares, ready-to-wear, etc.) and build up a relationship with the brand in the process.)

It is still early days for brands in the web3 arena, making it too early to say with certainty what – exactly – companies (including digitially-hesistant luxury players) will and will not opt to try. Chances are, while companies like Hermès might not jump at the opportunity to create a virtual pop-up in Roblox (save for maybe for things like their beauty ventures), the ultimate outcome for luxury brands in the virtual world will probably consist of a combination of creative products (even if those are merely digital representations of physical goods tied to NFTs that are provided to customers of those physical goods or NFTs tied to product-related editorial content) and uses born from a utility perspective, hence, the reference to authentication services in applications filed by Hermès. 

UPDATED (Sept. 15, 2022): In an interview with the WSJ, Hermès CEO Axel Dumas shed light on the company’s thoughts on the metaverse/NFTs, saying: “Blockchain technology allows you to track your supply chain and add data in a faithful way, which is interesting. NFTs as a product for sale in their own right is a trickier question. We are craftsmen, and we’re not just selling an image. But in 10 years if our clients require NFTs to accompany physical products, so they can have an avatar dressed as they are, we can think about it. I’m not sure we’d ever sell an NFT without a physical product, but in a way it won’t be up to us to decide. It will be the client.” 

Richemont and Farfetch are making good on a highly-anticipated deal that will see Farfetch further its quest to build the leading global luxury marketplace by acquiring a 47.5 percent “non-controlling” stake in its closest rival Yoox-Net-a-Porter (“YNAP”). In exchange, Richemont will get a 10 to 11 percent stake in Farfetch and a 2.7 billion euro ($2.7 billion) write-down. There is more to the transaction: In a statement this week, the parties also revealed that Emirati businessman Mohamed Alabbar will convert his stake in an existing YNAP joint venture into a 3.2 percent stake in YNAP. Taken together, Richemont and Farfetch say that this will make YNAP “a neutral industry-wide platform,” and position Farfetch to “potentially acquire the remaining shares in YNAP.”

Amid all of the YNAP-deal-centric headlines, there are a few elements worth considering at a bit more closely. Primarily, there is the timing of the announcement. While sources close to the matter previously told TFL that it would be made public in September, it is difficult not to suspect that mounting pressure from activist shareholder Bluebell Capital Partners may have prompted a shortened timeline. London-based Bluebell – which has been a Richemont shareholder for “1.5 years and had a stake worth 105 million Swiss francs ($109 million)” as of July, per Reuters – has been publicly pushing for change at the world’s second largest luxury goods group. In particular, the firm has been angling to get its co-founder Francesco Trapani on the Richemont board to represent investors holding A-class stock. (SIX Swiss Exchange-traded Richemont is controlled by Chairman Johann Rupert, who owns all the non-listed category B shares in the company.) 

At the same time, Bluebell is urging Richemont to focus its efforts on its jewelry and watches divisions, which include brands, such as Cartier, IWC, Vacheron Constantin, Piaget, and Van Cleef & Arpels, among others, which it believes will enable the company to double its share price in the medium term.

Against that background and in light of Richemont’s quickly-approaching Annual General Meeting on September 7, it makes sense that Rupert’s group is looking to “satisfy the first and ‘easiest’ of Bluebell’s demands,” Jefferies analysts Flavio Cereda and Kathryn Parker stated in a recent note, referring to a deconsolidation of YNAP. This is especially likely, they contend, as Richemont “has been working on this [transaction] for a very long time (presumably not helped by Farfetch’s collapse in share price) and has spent north of 30 million euros on fees, etc.”

In addition to reaching a deal ahead of what is expected to be a “volatile” shareholder meeting next month, the Jefferies analysts note that the announcement was timed “24 hours ahead of Farfetch’s Q2 print when presumably this topic would have been intensely debated.”

What About Alibaba? 

Another element of the YNAP agreement that has gone relatively unexplored is the noticeable absence of Alibaba, which was at the center of in a mega-deal that first brought Farfetch and Richemont together back in November 2020. Richemont and Alibaba invested a combined $1.1 billion in Farfetch, and a new venture specifically aimed at the Chinese market. The partnership between Farfetch, Alibaba, and Richemont appeared to be a neat precursor to another transaction, namely, Richemont selling off at least part of YNAP to Farfetch or to Alibaba. 

Alibaba, however, is nowhere to be found in the latest undertaking, potentially the result of issues that the Hangzhou, China-headquartered company has been facing – from its stock crash this spring and its inclusion on the U.S. Securities and Exchange Commission’s list of companies at risk of being delisted from U.S. exchanges due to a long-running dispute over the auditing to its (and other Chinese tech giants’) dealings with the Chinese regulators over algorithm data. “In the end, it seems to us that Farfetch [is] the only possible acquirer of YNAP (no sign of Alibaba or the brands often mentioned),” per Cereda – and it “called a lot of the shots here.” 

As for the other, “often mentioned” brands that are similarly absent from the Richemont-Farfetch deal, the most obvious is Artemis, the Pinault family investment arm that controls Kering, which is an existing investor in Farfetch. Richemont and Kering are closely aligned: They maintain a strategic eyewear partnership (Kering Eyewear produces glasses for Cartier and other Richemont-owned brands), recently launched a joint jewelry-and-watch sustainability project, and have prompted reports of a prospective merger of their own over the years.

LVMH was almost certainly never in the cards given long-running strife between the two groups and their respective leaders Rupert and Bernard Arnault. One of the latest manifestations of that clash is the legal battle that Cartier is waging against Tiffany & Co., accusing the LVMH-owned jewelry company of poaching employees and stealing trade secrets to build up its “high jewelry” business. And at the same time, Richemont is currently pushing back against Bluebell’s attempts to secure a spot for Francesco Trapani on the Richemont board on the basis that the former CEO of LVMH’s Bulgari brand maintains “a personal relationship with that group’s main shareholder,” Arnault, and is generally “too closely associated” with rival LVMH. 

With those big players out of the equation, Richemont and Farfetch seem to have swapped in another big-wig, Emaar Properties CEO and chairman Mohamed Alabbar, as an integral part of the deal. While Alabbar (via his investment firm Symphony Global) is touted in Wednesday’s release as a key player in the Richemont-Farfetch “partnership,” that may be more marketing spin than cold-hard-fact. There is a chance, after all, that Alabbar – whose Emaar Properties is the force behind real estate like the sweeping and luxury-packed Dubai Mall – simply converted his 40 percent stake in a Middle East-focused joint venture with YNAP into 3.2 percent of YNAP shares because it was the most seamless approach. It is arguably also the only move that makes much sense for Alabbar from a liquidity perspective; assuming that Farfetch does ultimately acquire the remaining stake in YNAP from Richemont, Alabbar’s stake in YNAP will convert to Farfetch stock. 

Looking beyond the parties to what Richemont and Farfetch are rightly calling “a landmark transaction,” the deal raises some questions for others, such as Armani, for example, which is the only sizable name that still relies on YNAP’s Online Flagship Stores (“OFS”) division to power its e-commerce operations. Given that OFS is “carved out of the transaction” and will remain with Richemont, Armani will be put in a difficult position in the event that Richemont is unwilling to provide the investment and other necessary resources/features that Armani requires to run its e-commerce business. In a likelihood, Armani will be left with little choice but to internalize its e-commerce operations as quickly as possible to reduce losses in online sales. 

Moving Forward

Looking ahead, Richemont has a put option requiring Farfetch to acquire all the remaining YNAP shares that Farfetch does not own at the time of exercise, at fair market value, exercisable at any time from the third to the fifth anniversary of completion of the initial stage of the transaction. This is subject to YNAP achieving positive adjusted EBITDA in the 12-month period prior to exercise, as well as in three of the four quarters over that same 12-month period. In other words, if YNAP does not turn a profit within the next five years, Farfetch is not obligated to complete the merger. 

If things go as planned, Richemont will become Farfetch’s second-largest shareholder, following only behind Farfetch founder José Neves, a prospect that Rupert is enthusiastic about. The Richemont chairman says he is “excited about the deal, and about Richemont’s future now that YNAP is hitched to Farfetch.” 

As for who will lead the charge at the “new” YNAP, the parties confirmed that they will replace current CEO Geoffroy Lefebvre, who was appointed by Richemont in late 2020, upon completion of the first stage of the agreement. One name is, of course, enticing to consider: Natalie Massenet, whose company Net-a-Porter was wholly owned by Richemont when it was merged with Yoox in September 2015. As much of a full-circle moment as having Massenet at the helm would be, such an appointment is probably unlikely. Massenet’s departure from Net-a-Porter right before the close of Richemont’s move to merge Net-a-Porter with Yoox was reported to be “abrupt” and “fraught,” and as TFL previously speculated here, given the history here, it would not make for an uncomplicated appointment. 

A Monopolized Market in the Making?

With Richemont and Farfetch embarking on a powerful partnership after the close of the first stage of the tie-up, which is slated for the end of 2023, and a potential merger after that, it will be striking to watch what other occupants of the luxury e-commerce space do now. More than any other player, the ball seems to be in MyTheresa’s court, with the Munich-based luxury e-commerce retailer soon to be facing off against a mightier combination of two unified titans. 

Chances are, NYSE-traded MyTheresa’s management has been preparing for this day since November 2020, and has a strategy for how it can differentiate itself and compete against YNAP and Farfetch – not on size but by way of a distinctive selection of brands, exclusive collections, etc., and the upsides that come with being more niche, including the inherent agility. Still yet, MyTheresa – which has a strong handle on product selection, curation, and editorial content, and boasts an engaged pool of high-value customers – has a year and a half to continue to gain ground since the integration of Farfetch and YNAP will be difficult and distracting for the parties, which is something that it can benefit from. The same is true for YNAP and Fafetch’s other competitors, including LUISAVIAROMA and SSENSE.

(It will also be interesting to see how quickly – and easily – Farfetch will be able to get Richemont’s brands on its marketplace and using its proprietary Farfetch Platform Solutions to execute their e-commerce operations. These two elements play no small role in the scenario, as Farfetch is reportedly very keen to get its hands on Cartier’s .com operations and eConcession, in particular. Brands like Cartier could prove to be challenging in that they will certainly demand significant personalization/customization from Farfetch’s platform that may or may not currently exist.)

Finally, with two of the biggest names in the luxury e-commerce space seemingly on track for an ultimate merger, it is tempting to wonder whether the space will operate as a monopoly – or whether a combination of YNAP and Farfetch would be blocked by regulators for this very reason. 

Chances are, this is not a monopoly in the making. After all, while YNAP and Farfetch are the giants in their arena, there will always be a bigger player out there than even the two of them combined: Amazon. And while Jeff Bezos’s venture may not have cracked the code on selling luxury goods (yet), it still sells an estimated $65 billion-plus of apparel and footwear each year, making it the behemoth in the fashion/apparel space – so much so that it unquestionably knocks Farfetch’s “record” gross merchandise value in 2021 of $4.2 billion and YNAP’s annual GM, which reached $2.6 billion for FY2022 (excluding its OFS division), down to size.  

Farfetch’s stock, which jumped by 21.3 percent in the wake of the YNAP news, is up again today following its Q2 earnings report on Thursday. Richemont’s share price rose 3 percent following the announcement on Wednesday, but is down by more than 3 percent as of the time of publication.  

The Federal Trade Commission (“FTC”) announced this summer that it is seeking comments on its plans to revise its digital advertising guide, potentially by way of revamped guidance that takes the metaverse/virtual reality into consideration. First released in 2000 and updated in 2013, the regulator’s “.com Disclosures Guide” aims to enable mobile and other online advertisers “to make disclosures clear and conspicuous to avoid deception.” The FTC revealed in June that it is seeking public comment on ways to modernize the guidance to align it with new advances in technology – including virtual reality (“VR”), augmented reality (“AR”), gaming, the metaverse, etc. – and how advertisers now interact with consumers.

In its initial call for comments, the FTC highlighted its desire to crack down on advertisers’ attempts to “avoid liability under the FTC Act by burying disclosures behind hyperlinks,” along with the rising use of “dark patterns” and “other forms of digital deception” – and many of the nearly 30 comments submitted focus on these issues. However, among the questions posed by the regulator in its June call for comment are two that specifically point to “emerging online technologies, activities, or features, such as … the use of advertising content embedded in games” and “issues that have arisen with respect to advertising that appears in VR or the metaverse.”

Since then, a number of the comments submitted – 8 out of 28, to be exact – make mention of the metaverse, and from those comments, a few key themes emerge as common points of consideration and concern of stakeholders, including lawyers in this space, ad watchdogs, academics, and industry organizations.

The Metaverse is Still Very Novel

The primary point of commonality among the comments submitted centers on the enduring novelty of the metaverse, and an overarching lack of clarity when it comes to this space and what it will evolve into. As a number of academics affiliated with Princeton University’s Center for Information Technology Policy (“Princeton”), for example, assert in their comments to the FTC, “The development of mixed reality (MR), VR, and/or ‘metaverse’ modes of interacting with services is still in their infancy.” Bryan Cave attorney Jim Dudukovich echoed this notion in a submission of his own, stating that “we are still in in the early stages of those worlds and may not fully understand how they will evolve in the future.” In light of the “emerging” nature of the metaverse, Baker Hostetler’s Linda Goldstein, writing on behalf of the Performance Driven Marketing Association (“PDMA”), notes that there is “a great deal of ambiguity [at play] about when and how the new platforms will develop.”

*This is a short excerpt from an article that was published exclusively for TFL Enterprise subscribers. Inquire today about how to sign up for an Enterprise subscription and gain access to all of our exclusive content.

Retail is rife with legal battles that pit industry occupants – from luxury brands to sportswear titans – and their valuable trademarks against one another. With the first half of the year behind us, here is a look at roughly a dozen currently pending trademark lawsuits that are worth keeping a close eye on, as brands clash over the use of their trademarks in connection with the marketing and sale of non-fungible tokens (“NFTs”), Chanel continues to face off against a couple of resale entities, footwear brands wage lawsuits over their trademarks (and trade dress), and celebrities and other big companies are slapped with reverse confusion-focused suits over newly-launched (or in Meta’s case, relatively newly-rebranded) endeavors.

No shortage of these cases are expected to provide guidance for brands and trademark practitioners, alike, with matters that are being waged over the use of marks on virtual goods/services (i.e., in the metaverse) and/or in connection with NFTs, likely to be especially useful in helping to lay the groundwork for future actions in this space.

Hermès International v. Mason Rothschild

In one of the first headline-making lawsuits involving NFTs, Hermès filed a trademark infringement, federal trademark dilution, false designations of origin, false descriptions and representations, cybersquatting, injury to business reputation, misappropriation, and unfair competition lawsuit against Mason Rothschild, the individual behind the collection of 100 MetaBirkins NFTs, early this year. Tied to images depicting furry renderings of its famous Birkin bag, Hermès claims that in furtherance of his sale of the NFTs, Rothschild simply “rip[s] off [its] famous BIRKIN trademark by adding the generic prefix ‘meta,’” which refers to “virtual worlds and economies where digital assets such as NFTs can be sold and traded.”

Rothschild has since argued that his “fanciful depictions of fur-covered Birkin bags and his identification of his artworks as ‘MetaBirkins’ are artistically relevant and do not explicitly mislead about their source or content,” and thus, should be protected from trademark liability by the First Amendment. While the court agreed that the Rogers test should be used to determine whether Rothschild’s use of Hermès’ marks is actionable under the Lanham Act, SDNY Judge Jed Rakoff determined in May that Hermès has sufficiently set out allegations that Rothschild’s use of “MetaBirkins” is not artistically relevant or is explicitly misleading and therefore, fails to meet the Rogers test.

Counsel for Rothschild lodged a memo of law in support of “an immediate interlocutory appeal” in early June, arguing that the case addresses “an issue being closely watched by the press because it is of special consequence to society at large and art markets in particular: whether artists are free under the First Amendment to depict or refer to trademarks in their art, and to describe what they have depicted, without fear of trademark liability.” Hermès subsequently pushed back in a memo of its own.

Reflecting on the case, a rep for Rothschild told TFL, “The judge ruled that MetaBirkins are artistic speech protected by the First Amendment. There are two remaining questions that the judge said need to be addressed. First, is the title “MetaBirkins” artistically relevant to the artwork? In our view the answer is clearly yes—the artworks are illustrations of imaginary fur-covered Birkin bags, and the title MetaBirkins describes what the artworks are about. The second question is whether I’ve made any explicit claim that Hermes is responsible for the MetaBirkins artwork, and again we look forward to showing that I’ve always identified myself as the creator, not Hermes.”

The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).

Chanel v. The RealReal, Chanel v. What Goes Around Comes Around

Chanel’s trademark-centric lawsuits against The RealReal (“TRR”) and What Goes Around Comes Around (“WGACA”) are still underway in the SDNY roughly four years after the cases were filed – with the parties in both cases currently clashing over discovery.

In the enduring trademark and anti-competition lawsuit that Chanel filed against TRR, the brand accuses the resale platform of “selling counterfeit CHANEL handbags, while also “represent[ing] to consumers that it ‘ensure[s] that every item on TRR is 100% the real thing, thanks to our dedicated team of authentication experts,’” and then offering up and selling a number of “counterfeit” Chanel products. Chanel has also taken issue with TRR’s “advertising and marketing practices,” claiming that the reseller “has attempted to deceive consumers into falsely believing that [it] has some kind of approval from or an association or affiliation with Chanel” when no such association exists.

Following a stay in the case while the parties participated in a mediation with the aim of a settlement, counsels for the two companies alerted an SDNY judge in December 2021 that they were “unable to reach a resolution of the matter at this time.” As of July 1, the parties were slated for a discovery hearing, including on whether certain documents should be clawed back as privileged, as Chanel has argued.

Meanwhile, Chanel is still embroiled in the separate – but similar – case that it filed against WGACA. After refusing to toss out the bulk of Chanel’s claims, including its trademark infringement and false association causes of action, a New York federal court ordered that the New York-based reseller provide additional information about its sale of Chanel-branded products. In an order in June, SDNY Judge Louis Stanton ordered WGACA to produce the monthly financial statements dating back to 2018 that its expert used to calculate WGACA’s profits, along with its summary of Chanel-branded product “sales and costs,” along with updated “Google Analytics information, data from Bitly, and internal reports relating to WGACA’s advertising using Chanel’s trademarks” – and the effectiveness of such ads.

Reflecting on the significance of the lawsuits, Foley & Lardner’s Jeffrey Greene and Allison Haugen have stated that the implications “could be broad-reaching, providing guidance to resellers on the parameters of a fair use defense to trademark infringement claims.” They also stand to provide “insights into the validity of antitrust-type claims in instances of claimed interference with the resale market, particularly in connection with Chanel v. The RealReal, as well as how resellers ought to describe the authenticity of the goods they sell.”

The cases are Chanel, Inc., v. The RealReal, Inc., 1:18-cv-10626 (SDNY), and Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).

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