Bad Day For Artists! Updates To The Hermès v Rothschild Dispute

Bad Day For Artists! Updates To The Hermès v Rothschild Dispute

Anita Gogia is a IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On February 8 2023, a nine-person jury delivered a verdict after three days of deliberation on the intriguing Hermès v Rothschild case. Rothschild engages novel issues of trademark infringement, trademark dilution, and cybersquatting ( domain name in this case) by artists in the metaverse.

Rothschild created 100 “MetaBirkin” NFTs in 2021 that depicted the Hermès Birkin bag in digital fur instead of leather, seemingly commenting on the animal cruelty present in luxury handbags. The NFTs were sold at a price of $450 each and recurring royalties on every further sale. After Hermès took down the NFTs from OpenSea, Rothschild moved to a different marketplace and continued to promote “MetaBirkin” on Discord. Rothschild argued that “art is art” and that the NFTs were a “playful abstraction of an existing fashion-culture landmark” under First Amendment protection. Essentially, he argued that “MetaBirkins” were akin to selling physical art prints.

The jury found that Rothschild’s “MetaBirkin” NFTs violate Hermès’ Trademark rights, was not shielded by the First Amendment, and awarded Hermès $133,000 in damages. The key issue was whether the “MetaBirkin” was artistic expression under First Amendment protection, or a commercial product that causes consumer confusion. The jury concluded that while artistic expression was present, Rothschild intended to confuse consumers.

During the trial, Hermès provided evidence of actual consumer confusion which included publications mistakenly linking “MetaBirkins” to Hermès, and a study (commissioned by Hermès) that found 18.7% of consumers were confused about if “MetaBirkins” were connected to Hermès. Rothschild rejected these claims by providing that he added a prominent disclaimer to his website clarifying that the “MetaBirkins” were not connected with Hermès in any way and that his publicist asked the publications to issue corrections.

The jury was also influenced by Judge Rakoff’s reasons to deny the motion for summary judgment, and his exclusion of expert testimony. Judge Rakoff held that the Rogers v Grimaldi test for artistic works applies where the key inquiry is whether the trademark was used to mislead the public. This test was applied as opposed to the Gruner + Jahr test, which applies where no artistic work is involved. Thus, Judge Rakoff held that the artistic relevance was present. Blake Gopnik provided expert testimony that Rothschild brought forth in this case. Had this been admitted, the jury would have heard that the “MetaBirkin” was akin to Andy Warhol’s depictions of Campbell’s Soup Cans; thus aligning them in the artistic expression context.

Following the decision, Rothschild’s legal team claimed that the dispute is “far from over.” The team also pointed out Hermès’ hypocrisy as a luxury fashion brand who claim they care about artists but “feel they have the right to choose what art is and who is an artist.” This case has been followed by many to observe how the court resolves the issue of NFTs using intellectual property for the purpose of artistic expression. It is unknown whether this decision stands as precedent since intellectual property right disputes are significantly context-based. After this decision, artists can only conclude for certain the importance of obtaining legal advice before using IP in their NFTs, even if it is in the name of artistic expression.