** This article was drafted by Logan Woodward, a Summer Associate in NRF’s Minneapolis Office. Logan is supervised by attorneys who are licensed in the State of Texas.
The MetaBirkin dispute continues before the United States Court of Appeals for the Second Circuit with arguments on the horizon later this year. We have reported on the dispute between Hermès of Paris, Inc. (“Hermès”) and Mason Rothschild over Rothschild’s “MetaBirkin” non-fungible token (“NFT”) collection and the promotion of the same previously, here.
In November 2021, Mason Rothschild, whose real name is Sonny Estival, created and sold NFTs linking to a depiction of a digital Hermès Birkin bag covered in various fur and unique patterns such as Van Gogh’s Starry Night. By early January 2022, Rothschild had sold over $ 1 million in “MetaBirkins” NFTs. Rothschild asserted that his works were protected artistic expressions under the First Amendment and that he was free to promote the same using social media handles, domain names, and hashtags which prominently used the “Birken” term. The district court judge twice refused to dismiss the Hermès’ claims prior to trial.
As noted in our previous blog post here, in February 2023, a Manhattan jury concluded that Rothschild had violated Hermès’ trademark rights with the promotion and sale of his NFT purse collection that depicted Hermès’ famous Birkin bag (shown below).
Picture: Copies of Rothschild’s “MetaBirkin” Fuzzy Handbags
In a case of first impression regarding trademark law and NFTS, the jury in the U.S. District Court for the Southern District of New York said that Rothschild’s promotion and sale of his “MetaBirkin” collection was likely to cause confusion among consumers. Rothschild, among other things, argued that he was a self-styled pop artist, like Andy Warhol, who was protected by the First Amendment when creating art. The jury was not convinced and found that Hermès’ had satisfied its burden of proving trademark infringement, trademark dilution, and that Rothschild was unlawfully cybersquatting on the MetaBirkins.com domain name. The jury awarded $ 133,000 in damages to Hermès, an award comprised of a disgorgement of Rothschild’s net profits, $ 110,000, and an award of statutory damages totaling $ 23,000 for Rothschild’s cybersquatting. Further, the court ordered Rothschild to transfer the MetaBirkins.com domain name and related materials to Hermès and he was enjoined from selling the MetaBirkens NFTs on his social media accounts using the “Birken” term as well as other platforms. However, he was not ordered to transfer his social media accounts related to the sale and promotion of the MetaBirkins NFTs to Hermès. Rothschild appealed the verdict to the Second Circuit.
One important aspect of this case was how the court interpreted and applied the Second Circuit’s Rogers v. Grimaldi test(the “Rogers” test). The Rogers test states that unauthorized uses of a trademark are safe from infringement claims if the use is both (1) an artistic expression and (2) does not explicitly mislead consumers. Judge Rakoff of the U.S. District Court for the Southern District of New York noted that, even when there is some artistic relevance, the First Amendment does not protect an expression from liability if it “explicitly misleads” the public as to the source of the work. Here, the jury concluded that the First Amendment did not shield Rothschild from liability of any of Hermès claims.
On appeal, Rothschild argues that the District Court misapplied the Rogers test and that his “MetaBirkin” NFT collection are protected works under the test. Rothschild is asking the Second Circuit to apply Rogers in the proper way to his case and reverse the district court’s decision. In contrast, Hermès has urged the Second Circuit to uphold the District Court decision contending that the First Amendment “does not afford artists special license to use an infringing trademark for ‘source identification.’”
In support of Hermès, Starbucks filed an amicus brief as has The American Apparel & Footwear Association, The Council of Fashion Designers of America, Inc., The Accessories Council, and the Halloween & Costume Association in a collective amicus brief. Starbucks, who owns some of the strongest and most recognizable trademarks in the world, urged the court to reject the assertion made by Rothschild that “the First Amendment protects a third party’s appropriation of another’s word or design mark when that third party is using the mark as an identifier of source to commercialize and promote its own goods or services.”[1] The collective amicus brief argues that Rothschild proposed “an expansive view of artistic license that would greenlight digital infringement.”[2] Motions to file amicus briefs were granted in November 2023 on behalf of Alfred Steiner, Jack Butcher, Authors Alliance, MSCHF, CTHDRL but no briefs have been filed to date. Additionally, the Chamber of Digital Commerce filed a motion to file an amicus brief, but Rothschild opposed the filing of the Chamber’s brief. The Chamber of Digital Commerce has since filed a reply to the opposition. Briefing has concluded and oral arguments are expected later this year.
This case has far-reaching implications regarding the ability of third parties to use trademark owners’ brands as a source of inspiration for their own goods and services and the promotion of the same online. The First Amendment may have a role in this analysis, but that role will likely depend on the specific nature of the third party’s goods, intent, and their efforts to promote the same.
The case is Hermès Int’l et al. v. Rothschild, case number 23-1081, in the U.S. Court of Appeals for the Second Circuit.
[1] Brief for The Starbucks Corporation as Amicus Curiae, p. 2, Hermès Int’l et al. v. Rothschild 23-1081 (2d Cir. 2024).
[2] Brief for The American Apparel & Footwear Association, The Council of Fashion Designers of America, Inc., The Accessories Council, and the Halloween & Costume Association as Amicus Curiae, p.4, Hermès Int’l et al. v. Rothschild 23-1081 (2d Cir. 2024).
