Briefing: March 24, 2023
The applicability of web3 continues to draw in fashion/retail brands. However, this rising interest has less to do with digital imagery linked to NFTs (à la the Bored Ape Yacht Club and MetaBirkins projects), which is what drove initial consumer interest in this space, and more to do with exploiting the utility of blockchain tech. In light of a larger drop in interest in digital asset-tied NFTs among consumers and brands, alike, that has been underway since last year, companies are leaning into the gaming aspect of the metaverse in some cases and utilizing blockchain in other ways – such as for traceability purposes – uses that appear to have a bit more staying power than once-buzzy PFPs.
A few recent examples are worthy of attention …
Aéropostale – The mall retailer has partnered with MetaversePlus to offer immersive shopping, socializing & gaming in its branded metaverse, AeroWorld. While there are NFTs at play here – consumers can purchase the 30k AeroPax NFTs (with crypto or a credit card for $69 each), Aero is planning to use them more as a way to offer up members-only perks and promotions.
Loro Piana – In the luxury space, LVMH-owned Loro Piana revealed that it is rolling out a digital certification service in partnership with the Aura Blockchain Consortium, which will see it “leverage QR code technology to verify the authenticity, traceability & composition of each item,” and to add an element of “storytelling” to each of its offerings’ “unique & complete journey.”
Chloè – Chloè is embracing blockchain via a venture announced last month. The Digital ID initiative will enable consumers to get a supply chain-centric snapshot of their garments/accessories, but more interestingly (I think) is the resale element. As part of the venture, Digital ID-tied items will have an “Instant Resale capability through Vestiaire’s platform.”
LVMH/Aura – On the heels of LVMH management emphasizing efforts on the repair front for its products (instead of diving into the resale market) last year, Frank Le Moal – CIO of LVMH and vice-chair of Aura Blockchain Consortium – recently addressed the importance of digital passports as a way to promote “long-term products, repair, and care,” seemingly shedding light on how LVMH is thinking about web3 tech.
On the legal front, we are keeping a close eye on the Nike v. StockX case, which sheds light on a concrete example of how companies are using NFT tech in connection with “real world” products. It is also an example of how brands might push back. (Nike filed suit against StockX in Feb. 2021, alleging that the reseller is running afoul of trademark law by offering up of NFTs tied to images and physical versions of Nike footwear.)
More to come shortly in our web3 use-case study, which will be made available exclusively for Enterprise subscribers.
On the litigation front …
– Roblox v. WowWee – WowWee filed its answer to Roblox’s amended complaint, with the toy-maker asserting via affirmative defenses that: Roblox’s “claims & requested remedies are barred to the extent that they violate the First Amendment;” the alleged trade dress “lacks distinctiveness, lacks secondary meaning, is functional, and/or is generic;” Roblox’s © & TM claims are barred by the doctrine of fair use, etc.
– Chanel v. The RealReal: The parties are still clashing over discovery (and seemingly frustrating Judge Gorstein in the process).
– S10 Entertainment v. Samsung: A federal jury in California sided with Samsung in a trademark caseaccusing it of infringing a talent management company’s S10 TM by way of its S10 phones on the basis that consumers are unlikely to be confused.
– Hermès v. Rothschild – The Birkin bag-maker’s Bill of Costs Notice of Taxation, was rejected by the Clerk’s Office because “there is a motion for a new trial pending in the case.” (A timeline for that case is right here.)
A Design Patent Bite
A design patent (D981115) was issued to Fendi this week for this “fabric” …
A Quick Roundup of Qs for SCOTUS This Week
– Jack Daniel’s Properties v. VIP Products LLC – Is humorous use of another’s TM as one’s own on a commercial product subject to the Lanham Act’s likelihood-of-confusion analysis, or entitled to heightened First Amendment protection?
– Abitron Austria GmbH v. Hetronic International, Inc. – Does the Lanham Act permit the owner of a U.S.-registered trademark to recover damages for the use of that trademark when the infringement occurred outside the United States and is not likely to cause confusion in the U.S.?
– Coinbase v. Bielski – In its first crypto case, SCOTUS is considering whether “a non-frivolous appeal of the denial of a motion to compel arbitration oust a district court’s jurisdiction to proceed with litigation pending appeal, as the 3rd, 4th, 7th, 10th, 11th and D.C. Cir. have held, or does the district court retain discretion to proceed with litigation while the appeal is pending, as the 2nd, 5th, and 9th Cir. have held?”
In some deal-making news … AI startups continue to dominate. Character.AI, for instance, raised $150M in a Series A round led by Andreessen Horowitz. The round values the AI chatbot startup – which has not generated any revenue since its founding in Sept. 2022 – at $1 billion. – Korean resale platform Kream has raised a $168M in a Series C round, which values Kream at approximately $742M, up from $306M in Oct. 2021.
– Illumix has raised $18M in a Series A round. The co. provides “a low-code AR software that enables marketing leaders, and creative executives to easily make immersive AR experiences, without the need for technical expertise.”