Trademarking in the Metaverse and NFTs – the MetaBirkin decision

In one of the first legal cases to assess how trade mark law will apply to digital images protected by non-fungible tokens (“NFTs”), a New York jury has found that the MetaBirkin images produced by Mason Rothschild infringe the trade mark rights of Hermès in its Birkin bag.

Artist Mason Rothschild created images of a famous Hermès handbag known as the Birkin. The images showed the Birkin bag digitally covered in fur. Rothschild turned the images into an art project which he called the MetaBirkin. NFT protected editions of the images were then sold online.

Hermès sued Rothschild in New York for trade mark infringement, claiming that the MetaBirkin brand rips off its trade marks in Birkin by adding the generic prefix “meta”.

Rothschild responded to the claim arguing he had a right to produce art even if that art included reproductions of products protected by trade marks and that his art work was not infringing the rights of Hermès because he was not producing and selling real handbags.

Prior to the issuance of the decision, a hot topic for discussion was whether Hermès would face difficulties caused by the fact its trade mark registrations cover physical handbags, but do not cover virtual goods, digital products or NFTs.

On Wednesday 8 February 2023, a Manhattan jury found Rothschild liable for trade mark infringement, agreeing with Hermès position that consumers would likely confuse the MetaBirkin NFTs with genuine Hermès products.  The rights of Hermès in handbags were sufficient for a finding of trade mark infringement without the need for Hermès to have registered rights covering digital products or NFTs.

The case has been closely watched by luxury brands and retailers and is one of the first tests of how trade mark law will apply in the Metaverse. Some luxury brands have already ventured into the world of NFTs and the Metaverse, including names such as Nike and Gucci and it is likely many more will follow.

The decision follows what we understand to be the first decision from a European Court relating to NFTs in the Juventus case in mid-2022 (see our report here). The Juventus decision also supported the idea that trade mark registrations covering “conventional” goods can be sufficient to prevent use of NFTs on “virtual” goods.

Both the MetaBirkin and the Juventus decisions will be a relief to trade mark owners, and particularly to luxury fashion houses. Some luxury brands have been early adopters of the Metaverse and NFTs, but for those brands who have not yet ventured into this market, the risk of a third party infringer is high. These early decisions should give those brands some comfort that their existing IP portfolio, covering the physical goods offered by the brand, should be sufficient to allow them to take action against NFTs which reproduce those goods.

Category: News | Author: Ian Gill, Sarah Neil | Published: | Read more