Hermès made headlines in December 2021 when an artist named Mason Rothschild revealed in an open letter that it had sent him a cease-and-desist letter, alleging that he was infringing its federally-registered trademarks by way of the sale of non-fungible tokens (“NFTs”) called MetaBirkins. In the letter to Hermès, which Rothschild posted to the MetaBirkins Instagram account, he argued that the NFTs are shielded from Hermès’s trademark claims by “the First Amendment, [which] gives me every right to create art based on my interpretations of the world around me.”
After initially positioning the NFTs as a “tribute” to Hermès’s most famous offering and “an experiment to see if [he] could create that same kind of illusion that [the Birkin bag] has in real life as a digital commodity,” Rothschild asserted that the MetaBirkins NFTs – the first of which sold on December 3 for $42,000 – act as “a commentary on fashion’s history of animal cruelty, and its current embrace of fur-free initiatives and alternative textiles.”
In light of Rothschild’s unwillingness to meet the demands set out by Hermès in its cease-and-desist (including pulling the NFTs from the market), the Birkin bag-maker filed suit against him in a New York federal court on January 14, accusing him of federal and common law trademark infringement, false designation of origin, trademark dilution, cybersquatting, and injury to business reputation and dilution under New York General Business Law, and seeking monetary damages, including the profits that he made in selling the NFTs, and injunctive relief to bar him from making further use of its trademarks.
Since Hermès first filed suit in January 2022, the case has proven to be a closely-watched matter due to its status as one of the first lawsuits to center on the intersection of trademarks and NFTs and its focus on key questions, including the extent to which “real” world trademark rights extend to the virtual world. At the same time, the case has been cited in a number of the other web3-centric lawsuits that have proliferated since, such as the one that Yuga Labs has waged against Ryder Ripps and a separate case over a Bored Ape Yacht Club NFT that landed before a court in Singapore.
Given the importance of the MetaBirkins case, we have put together a brief timeline of notable filings (complete with links to any corresponding articles) – and now, updates from the parties’ jury trial – in order to help you to stay abreast of developments …
Mar. 14, 2023: Counsel for Rothschild lodged a renewed motion for judgment as a matter of law or a new trial, as well as an opposition to Hermès’ permanent injunction bid, arguing in the latter that Hermès “has unclean hands that should bar the injunctive relief it now seeks because it engaged in a pattern of deliberately dishonest conduct throughout trial.” Moreover, Rothschild’s counsel claims that Hermès “has produced no evidence of any concrete harm that it has suffered from Mr. Rothschild’s promotion and sales of his MetaBirkins artworks; rather, the evidence shows that Hermès’ sales of Birkin bags have continued to increase year over year, even after the MetaBirkins were released.”
Mar. 3, 2023: Hermès filed has a motion for a permanent injunction, urging the court to permanently block Rothschild’s promotion and sale of the NFTs on the basis that he will continue to engage in infringement if he is not stopped.
Feb. 24, 2023: Following a conference with the court on Feb. 24, Judge Rakoff has granted Rothschild leave to file an opening brief on the issue of interviewing the jurors by March 3. (Hermès will then have until March 10 to respond.) Hermès is also granted leave to file a motion for a preliminary injunction by March 3, at which point Rothschild will have until March 10 to reply. The court granted the application to delay adjudication of the attorney’s fee issue “until an appeal has been completed or the possibility of an appeal extinguished is granted.”
Feb. 24, 2023: Blake Gopnik, the Warhol expert who was blocked from testifying at trial, has written a Washington Post op-ed, entitled, ” A misguided jury failed to see the art in Mason Rothschild’s MetaBirkins.” Among other things, he asserts …
– “I couldn’t see any real difference between Rothschild and the many artists, good and bad, who made art about our culture’s commerce, often by including trademarked goods: There’s Warhol and his Campbell’s Soups, Coca-Colas and Brillo Boxes … Earlier artists also profited from including trademarked goods in some of their most famous paintings, and I guess Hermès must wish they hadn’t been allowed to.”
– “Compared with a lot of these precedents, Rothschild’s MetaBirkins positively obscure their connection to the brand. The Birkin-ish bags Rothschild depicted could only ever have existed in his over-fertile imagination: He portrayed them covered in the most garish fake fur, such as it’s almost impossible to imagine on an actual Birkin bag.”
– “In the end, I was not allowed to present my findings to the jury … but I still imagined that no jury would actually prevent a young artist from making pictures of pretty much whatever he wanted, whether it bothered a great bag-maker or not … I was wrong about that jury but hope an appeals court will realize that the jury was wrong about Rothschild’s art.”
Feb. 14, 2023: The court entered a final judgment in favor of Hermès.
Feb. 8, 2023 (10:30am): The jury has sided with Hermès in its fight over digital artworks that mirror the design of its famed Birkin bag – and that bear the name “MetaBirkins” – and that are tied to non-fungible tokens that were first offered up in December 2021. Finding that MetaBirkins creator Mason Rothschild is liable on all three counts, trademark infringement and dilution, and cybersquatting, and that he is not shielded by First Amendment protections, the jury returned their verdict on Wednesday morning (early into the third day of deliberations), awarding Hermès roughly $133,000 in damages.
Feb. 7, 2023: The court has entered its instructions of law for the jury.
1pm: Inner City Press reports that the jury has sent out a note to the judge inquiring about what to do if they are “unanimous on the first three counts [trademark infringement, dilution, and false designation of origin], but can’t decide on First Amendment.” Judge Rakoff says, “Keep deliberating.”
No verdict today. Deliberations to resume again tomorrow at 10am EST.
Feb. 6, 2023: The parties have made their closing arguments, with BakerHostetler’s Oren Warshavsky arguing on behalf of Hermès that Rothschild wanted to “cash in on the Birkin name” – a famous trademark and one of the brand’s most valuable assets – by way of his MetaBirkins NFTs. Meanwhile, Rothschild’s counsel Rhett Millsaps reiterated his earlier arguments that Rothschild had no intention of confusing consumers about the source/nature of the artwork-tied NFTs, as indicated by him taking credit for the project (including correcting inaccurate media reports) and his use of a disclaimer on the MetaBirkins website, among other things.
– Counsel for Rothschild also asserted that he “could have charged more for the MetaBirkins,” but opted not to as it “was an artistic experiment, [and] he wanted to see what kind of value people would ascribe to these two dimensional pictures.”
– Additionally, prior to the case being submitted to the jury for deliberations, Judge Rakoff denied Hermès and Rothschild’s respective motions for judgment as a matter of law.
4:30pm: The jury submitted a question to Judge Rakoff, asking “when Hermès applied for a digital trademark.“ The judge responded with a note that the date of Hermès’ NFT-centric trademark filing “is not in evidence and therefore cannot be furnished, to be delivered to the juror on the morning of February 7.” (Hermès lodged a trio of web3-focused trademark applications for registration with the USPTO on August 26, 2022.) NouNFT’s Ed Lee states that “the question appears to signal the interest of at least some jurors in wanting to know how soon Hermès planned on entering the new market for digital uses involving NFTs.”
*My initial reaction to the question was that it could potentially reflect poorly on the jury’s (mis)understanding of how trademark rights are amassed in the U.S. (i.e., via actual use and not by way of registrations). Certainly, the trial has been rife with (and the jury has been faced with) complex/confusing topics and issues, with the ins-and-outs of trademark rights being among them. Also risky for both parties: the chance that the jury is confused about the nature of NFTs generally.
Feb. 5, 2023: The parties submitted letters re: Dr. Neal’s Supplemental Report and Jury Instructions. Hermès’ filing can be found here.
Feb. 3, 2023: Maximilien Moulin, head of the Innovation Lab at Hermès, testified today, speaking to the company’s enduring behind-the-scenes efforts on the NFT front, stating that the lab had first created a digital Birkin bag back in October 2021. While the company never released a public-facing version of the virtual Birkin, Moulin stated that he believes that the MetaBirkins NFTs “could confuse people” as to their source.
– Scott Kominers, a professor in the Entrepreneurial Management Unit at Harvard Business School, testified via video. Citing sales of the Neo Tokyo Citizens and Mobland NFTs, Kominers stated that the initial success of the MetaBirkins NFTs – gauged namely by the average trading volume for the 17 days that they were available on the OpenSea marketplace before the listings were removed – was striking. Kominers testified that at least some of the success was likely the result of consumers believing that Hermès was involved in/otherwise affiliated with the project.
– Hermès’ corporate communication manager Luisa Maria Vittadini testified to Hermès selective approach to media, and to inaccurate media coverage from L’Officiel, Elle, and The New York Post that reported that Hermès was affiliated with the MetaBirkins NFTs, stories that were likely viewed by millions of consumers before corrections were made.
– Finally, Dr. David Neal, who Rothschild’s team tapped to rebut the survey evidence of confusion collected by Hermès’ expert, pushed back against Hermès expert Bruce Isaacson’s consumer confusion survey results, which “found net confusion among the NFT audience of 18.7 percent,” which Hermès’ counsel asserted is “evidence of a substantial likelihood of confusion.”
Feb. 2, 2023: Judge Rakoff issued his opinion and order regarding the parties’ cross motion for summary judgment, elaborating on an earlier refusal to grant either party’s motion.
Feb. 1, 2023: Rothshchild returned to the stand, testifying that he created the MetaBirkins NFTs as an “experiment,” which was inspired by the fact that Hermes has not followed the trend of other luxury brands, including those owned by Kering, swearing off fur. He also noted his life-long interest in fashion and art.
He also testified to the fact that he promoted the project via social media outlets and a Discord server, the latter of which boasts 50,000 members. He also confirmed that he looked to big-name NFT influencers to help generate interest in the project and boost secondary market prices. And speaking of the secondary market, Rothschild confirmed that he receives a 7.5 percent royalty when the NFTs are resold.
– Among other points of interest: The jury was shown text messages in which Rothschild told the developer of the MetaBirkins NFTs, “We’re sitting on a gold mine.” He also said in separate messages – in response to a question about whether the MetaBirkins could be used on metaverse platforms – that the NFTs are “technically metaverse ready,” as they “are made in a 3D program but today they are 2D images … MetaBirkins are pictures of those 3D images in 2D.”
Jan. 31, 2023: Hermès’ expert witness, Kevin Mentzer; Nicolas Martin, group general counsel for Hermès; and Mason Rothschild took the stand on Tuesday, ending with Rothschild still testifying. Among other things, the parties testimonies included …
– Martin confirmed plans by Hermès to operate in the metaverse/make use of NFTs. While he did not cite specific plans, he mentioned the potential use of digital twins to aid in the authentication of bags or including NFTs as add-ons to physical products in order to offer consumers token-gated benefits. Echoing Chavez’s previous testimony, Martin said that the Birkin bag is Hermès most important product and one of its most valuable trademarks.
On cross, Rothschild’s counsel pointed to other unauthorized uses of Hermès marks, including projects by Tom Sachs and Tyler Shields.
– Rothschild testified to his desire to comment on the fashion/luxury industry’s embrace of fur-free initiatives, stating that he aimed to he make money from the MetaBirkins “project.” He stated that he was not looking to mislead consumers as to the source of the NFTs and took credit for the project, himself.
Jan. 30, 2023: The parties’ trial kicked off in the U.S. District Court for the Southern District of New York. Hermès’ counsel told the jury that they filed suit against Rothschild on the basis that they “thought people would wrongly think Hermès was involved” in his MetaBirkins NFT project, especially since the company has been planning an NFT venture of its own. Counsel for Rothshchild, on the other hand, asserted that as long as a product is artistically relevant and does not explicitly mislead consumers as to the source of the goods, then it is protected under the First Amendment, noting that most of Rothschild’s previous projects similarly included elements of social commentary.
– In an early win for Hermès, Judge Rakoff held that one of Rothschild’s proposed witnesses, Dr. Blake Gopnik, cannot testify at trial. Gopnik, who authored an Andy Warhol biography, was slated to testify that Rothchild’s MetaBirkins are akin to Warhol’s Campbell’s Soup artwork. Hermès argued that Gopnik should be precluded from testifying on the basis that his “opinion is not based upon any reliable data or methodology to support his mere ipse dixit assertions;” he “opines on ultimate legal conclusions;” his opinions “do nothing more than repeat Rothschild’s account of his own statements and actions;” and he “improperly interprets and opines on Rothschild’s intent in creating and promoting the METABIRKINS NFTs.”
– Rothschild’s defense relies in part on his argument that the MetaBirkin’s are similar to Andy Warhol‘s famous soup cans work, which was not authorized by Campbell’s. His counsel also put forth the point that the value of the MetaBirkins NFTs, which firs sold for $450 each. While their value grew following their release, Rothschild, himself, only pocketed a “small percentage” of the resale sales via royalty payments.
– The jury was shown images from Rothshild’s social media accounting promoting the NFTs, as well as text messages sent by Rothschild in which he referred to the NFT-linked artworks as “Birkins.” (These are presumably some of the pieces of evidence that counsel for Rothschild was looking to exclude by way of its motion in limine.)
– Robert Chavez, president and CEO of Hermès Americas, testified, pointing to Hermes’ own effort to test an NFT project of its own. Another key point from Chavez (on cross-examination): He is not aware that Hermes actually lost revenue any revenue as a result of Rothschild’s sale of the MetaBirkins. Chavez also stated that in connection with lectures he gave at Harvard Business School and Columbia that students inquired as to whether Hermès was connected to the MetaBirkins NFTs.
– Also worth noting: The court found Hermès’ counsel and expert’s (data scientiest Kevin Mentzer) explanations of NFTs to be burdensome, noting that the jury appeared to be confused. Mentzer asserted, among other things, that the MetaBirkins NFTs are more akin to trading cards than artworks like the Mona Lisa.
Jan. 23, 2023: The parties lodged their respective motions in limine and motions in support, looking to get the court to exclude an array of proposed evidence, from the fast-approaching trial.
Jan. 12, 2023: In a minute entry, the court stated that following a “conversation with the parties counsel, [Rothschild] may file a motion to dismiss the amended complaint of up to 30 pages double-spaced, which must be filed by January 20, 2023.” The plaintiffs answering papers must be filed by February 7, 2023, and any reply is due on February 14, 2023.
Dec. 30, 2022: After “careful consideration” of the parties’ briefing and oral argument in favor of summary judgment, Judge Rakoff denied the parties respective motions. In a brief order, the court reminded that parties that a trial will begin on January 30, 2023, and stated that an opinion explaining his ruling on summary judgment will be issued by January 20
Nov. 30, 2022: Jury trial date set for Jan. 30, 2023.
Oct. 22, 2022: Hermès files Memo in Opposition to Rothschild’s Motion for Summary Judgment.
Oct. 21, 2022: Rothschild files Memo in Opposition to Hermès’s Motion for Summary Judgment.
Oct. 8, 2022: Hermès files Memo in Support of Motion for Summary Judgment. Among other things, Hermès asserts in its motion that its claims for trademark infringement and unfair competition are “clear and undisputed, [while] Rothschild’s sole defense – that his conduct is protected by the First Amendment – is devoid of merit.”
Oct. 7, 2022: Rothschild files Memo in Support of Motion for Summary Judgment. Counsel for Rothschild argues that: (1) Rothschild’s MetaBirkins are creative expression protected by the First Amendment – i.e., that each of the MetaBirkins images individually, and the MetaBirkins project as a whole, are art; (2) the title “MetaBirkins” is artistically relevant to the artworks and to the project at issue—not least because that title indisputably describes the artworks’ content; (3) Rothschild has done nothing to explicitly mislead regarding the source of the MetaBirkins artworks, and Hermès has never been able to identify any explicitly misleading statement; and (4) Hermès has failed not only to establish explicit misleadingness, but has failed to show any significant likelihood of consumer confusion.
Oct. 5, 2022: Court refuses to certify Rothschild’s Motion to Certify Interlocutory Appeal. The judge determined that the issues at play in Rothschild’s appeal are not so “exceptional” as to warrant immediate appellate review, and denied Rothschild’s motion in full.
Sept. 28, 2022: Hermès files Notice of Motion for Summary Judgment.
Sept. 28, 2022: Rothschild files Notice of Motion for Summary Judgment.
Jun. 24, 2022: Hermès files Opposition to Rothschild’s Motion to Certify Interlocutory Appeal.
Jun. 6, 2022: Rothschild looks to appeal to 2nd Cir. In a motion to certify interlocutory appeal and memo in support, Rothschild argued that there is “substantial ground for difference of opinion regarding the court’s application of the Rogers test in its May 18 order, and also “substantial ground for difference of opinion regarding the Order’s handling of the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., which the order dismisses in a footnote.”
May 5, 2022: Court refuses to grant Rothschild’s Motion to Dismiss. In a brief order on May 5 and a subsequent memo order on May 18, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York denied Mason Rothschild’s motion to dismiss. Siding with Rothschild in part, Judge Rakoff stated that Rogers is the appropriate test “at least in part” for analyzing trademark infringement. However, the court decided not to toss out the case on the basis that Hermès’s amended complaint contains sufficient factual allegations that Rothschild’s use of the trademark is not artistically relevant and that the use is explicitly misleading.
Apr. 4, 2022: Hermès files Opposition to Rothschild’s Motion to Dismiss. Hermès asserted that the court should deny Rothschild’s motion, arguing that his motion to dismiss “invites the court to make factual determinations contrary to the allegations [in Hermès’] amended complaint and change the law to immunize infringers from Lanham Act claims in virtual worlds known as the metaverse.”
Mar. 21, 2022: Rothschild files a Motion to Dismiss Hermès’s amended complaint. At the heart of Rothschild’s motion was his argument that Hermès’s trademark infringement and dilution claims should be dismissed based on precedent set out in Rogers v. Grimaldi, as Rothschild’s “fanciful depictions of fur-covered Birkin bags and his identification of his artworks as ‘MetaBirkins’” meet the “low threshold of minimal artistic relevance,” and that there is “nothing explicitly misleading about Rothschild’s depictions of Birkin bags, his use of the ‘MetaBirkins’ name as the title of his art project” and/or his use of the term on his website and social media accounts.
Mar. 2, 2022: Hermès files Amended Complaint. While Hermès set out the same causes of action and its allegations largely mirror those in its initial complaint, it bulked up the amended complaint by way of examples of alleged consumer confusion (including Instagram comments and media reports). It also provided background on NFTs and how they work.
Feb. 9, 2022: Rothschild files Motion to Dismiss. In a motion to dismiss, counsel for Rothschild doubled down on the First Amendment arguments that he cited in open letter to Hermès, claiming that the rendering of Hermès’s most famous offerings in virtual faux fur “comments on the animal cruelty inherent in Hermès’s manufacture of its ultra-expensive leather handbags,” and thus, should be shielded from the brand’s headline-making trademark claims.
Jan. 14, 2022: Hermès files Complaint against Mason Rothschild. Claiming that Rothschild “flatly refuses to stop selling the METABIRKINS NFTs,” which allegedly caused consumer confusion, the luxury goods brand filed suit against him, setting out claims of common law trademark infringement, false designation of origin, trademark dilution, cybersquatting, and injury to business reputation and dilution under New York General Business Law.
The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).