In a verdict dated February 8, 2023, a jury in Manhattan, New York, has awarded Hermes International and Hermes of Paris, Inc. $133,000 in total damages holding the defendant, Mason Rothschild, liable for trademark infringement, dilution, and cybersquatting. In this first-ever trial case dealing with Non-Fungible Tokens (NFTs), the jury deliberated and decided that the sale of “MetaBirkin” NFTs infringed upon Hermes’ trademark, “Birkin”.
Hermes, a luxury brand under the trademark “Birkin”, sold handbags made of leather. Whereas Mason Rothschild, an artist, created and sold digital NFTs known as “Metabirkin”, which resembled the Birkin bags but with fur and artwork on their exterior (as opposed to leather).
In December 2021, a cease-and-desist letter was sent to the defendant alleging that the NFTs infringed upon the trademark “Birkin”. Since the artist took no action upon receipt of this letter, a case was filed before the United States District Court for the Southern District of New York on January 14, 2022. The plaintiffs sought monetary damages, including the profits from the sale of NFTs, and an injunction as a relief.
The plaintiffs contended that the defendant’s use of “MetaBirkin” misled customers and made them believe that “MetaBirkin” was an NFT of Hermes. On the other hand, the defendant claimed that the digital assets created by him are works of art and amount to artistic expression protected as freedom of speech and expression guaranteed under the First Amendment of the US Constitution.
After an 9-day trial, the jury concluded that the unauthorised version of the dubbed bags in the virtual space amounted to a trademark infringement, as customers were likely to be confused with the origin of these bags. It further noted that NFTs as artistic work could not be protected under the First Amendment if it violates trademark laws and deceives consumers.