Jury Returns Verdict for Hermès In Trademark Dispute Over MetaBirkins NFTs
02/09/2023On February 8, just two days after we published our last post, the jury in the MetaBirkins case reached a verdict, awarding Hermès $133,000 in damages in connection with the fashion house’s claims of trademark infringement, dilution, and cybersquatting. The jury also specifically concluded that First Amendment free speech concerns did not preclude Rothschild from being held liable, apparently rejecting Rothschild’s position that his works were an artistic statement about luxury goods, and should be protected. On this point, the court had instructed the jury that, although the parties disagree about the extent to which the MetaBirkins are works of artistic expression, it was nevertheless “undisputed” that they were “in at least some respects works of artistic expression,” and that therefore, “Mr. Rothschild is protected from liability… unless Hermès proves by a preponderance of the evidence that Mr. Rothschild's use of the Birkin mark was not just likely to confuse potential consumers but was intentionally designed to mislead potential consumers into believing that Hermès was associated with Mr. Rothschild's MetaBirkins project. In other words, if Hermès proves that Mr. Rothschild actually intended to confuse potential customers, he has waived any First Amendment protection.”
This verdict does not spell doom for NFTs writ large, but it counsels caution for artists (digital or otherwise) whose art makes use of another party’s brand or product. While many copyright disputes focus on the fair use factors, trademark law focuses much more on consumer perception and whether consumers might be confused about whether a product is affiliated with or endorsed by a trademark owner. As other commentators have noted, this case is also unfolding at an interesting time, because the Supreme Court is poised to hear arguments next month in a case that may further explore what role the First Amendment concepts like freedom of expression and parody should play in trademark disputes. We will continue to follow these topics with interest, particularly given that Rothschild reportedly plans to appeal.
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