Can NFTs in Virtual Space Infringe ‘Real’ Trademarks?

Hermès International v. Mason Rothschild, currently an ongoing trial in the District Court of Southern District of New York, raises a relevant question on the character of Non-Fungible Tokens (NFTs). The case peruses whether NFTs can be classified as artistic expressions, capable of being protected under the First Amendment Rights, or as digital products, capable of encroaching upon protected trademarks.

The crux of contention in the case arises out of digital artist Mason Rothschild’s 100 NFTs, released in 2021, titled MetaBerkin, which depicts furry, cartoonish versions of Hermès Birkin bags. The NFTs, according to Rothschild, is meant to be a commentary on society’s association of high-valued luxury goods and status symbols with artistic value. The NFTs are “an experiment” to assess if Rothchild “could create that same kind of illusion that [the Birkin bag] has in real life as a digital commodity”.
Hermès filed the case in January 2022, claiming trademark infringement, against Rothschild, for misappropriation of the Birkin trademark, establishing a false association of the NFTs with Hermès, and harming Hermès’ ability to enter the NFT space, by use of the title MetaBerkin for the NFTs.

Rothschild’s contention is that MetaBirkin NFTs are creative expressions protected by First Amendment rights. The NFTs individually and the project as a whole are art and the title “MetaBirkin” is relevant to the project and not to the content in the artwork. Rothschild’s arguments rely on the Rogers test [Rogers v. Grimaldi 875 F.2d 994 (2d Cir. 1989)] which allows the use of a trademark in artistic work, without permission, so long as such use of the mark has a ‘minimal level of artistic relevance’ and does not explicitly confuse consumers.

This case is one of the first lawsuits to focus on the extent of application and validity of trademark laws in the virtual world, and specifically what is the significance and impact, on trademarks, of using unique digital identifiers in a blockchain to link NFTs. The case, currently in trial, may establish judicial precedence, by interpreting the decades-old trademark laws in the light of the new-age technologies, and contour the extent of artistic expression in the Rogers Test.

Sources:

https://news.bloomberglaw.com/ip-law/first-nft-trademark-trial-pits-hermes-against-metabirkin-artist
https://www.bloomberglaw.com/public/desktop/document/HermesInternationaletalvRothschildDocketNo122cv00384SDNYJan142022?doc_id=X1Q6ODL37A82
https://law.asia/nft-regulation-in-india/
https://www.thefashionlaw.com/hermes-v-rothschild-a-timeline-of-developments-in-a-case-over-trademarks-nfts/

Authored by: Ipshita Bhattacharyya

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