In one of the first cases to address the high-tech new art world of non-fungible NFTs a New York jury ruled on Wednesday that an artist violated the trademark rights of French fashion house Herm s by selling pictures of furry, copycat purses as NFTs.
The jury ruled that artist Mason Rothschild's unauthorized versions of Herm's iconic Birkin bags, which the artist covered in fur, featured in an image collection he dubbed MetaBirkins and sold for a total of over $1 m, were likely to confuse consumers.
The jury awarded Herm $133,000 in damages for trademark infringement, dilution, and a violation called cybersquatting, which involves registering or using a brand's trademark in bad faith.
Under the first amendment, the jury found that Rothchild's use of the bag's likenesses did not constitute a protected form of speech.
Rothschild's attorney Rhett Millsaps said the result was a terrible day for artists and First Amendment Representatives for Herm s did not respond to requests for comment from Reuters.
The case is closely watched for its potential to clarify how trademark law will apply to NFTs, which are unique tokens on a network that are often used to verify ownership of digital art.
Herm s prized leather Birkin handbags typically sell for tens of thousands of dollars each.
Rothschild portrayed the bags in 100 whimsical pieces showing purses covered in rainbow-colored shag fur or green fur, wearing a red Santa cap.
Herm s sued, claiming that the artist is simply a digital speculator who is trying to get rich quick by appropriating Herm's brand.
The Metabirkins brand simply rips off Herm's famous Birkin trademark by adding the generic prefix meta to the original complaint filed by Herm s in January last year, noting that the meta in the name refers to the digital metaverse now being pumped by technology innovators as the next big thing in tech profit-making.
Rothschild, whose real name is Sonny Estival, compares his use of the bags with Andy Warhol's portrayal of giant Campbell's soup cans in his famous pop culture silk screens. He said his depictions of the bags were an absurdist comment on the excesses of the fashion world.
I am not selling fake Birkin bags. Rothschild wrote a letter to the community after the case was filed. I am creating artworks that depict imaginary fur-covered Birkin bags.
Michelle Cooke, a partner at the law firm ArentFox Schiff LLP, said the decision would be very meaningful for brands, as many people have expressed interest in getting into the metaverse, where they might make money selling digital clothing that might be worn by avatars and the like.
She said that this decision is an important win for Herm s and brand owners more generally. We do not know what pushed the jury over to Herm's side. One issue that they likely weighed was evidence indicating that Rothschild launched the MetaBirkins NFTs as a commercial venture, rather than an art project.
She said that the jury came to a decision after just one day of deliberation shows that they found the issues clear-cut.
She said that the jury was not hindered by the fact that NFTs were the medium at issue. The jury concluded that existing trademark laws are sufficiently elastic to protect brand owners rights as well as NFTs. She said the issue is likely to come up again, as brands try to sell their products in the metaverse and artists push the boundaries of new technology art types. She said that the case could end up being appealed.
She said there will still be tensions between brand and content owners in emerging digital environments.