Hermès sued Rothschild in January, alleging that it infringed the trademarks of its famous Birkin luxury handbag by creating and selling MetaBirkins NFTs, which are bought and sold using blockchain technology. The NFTs depict digital images of Birkin handbags, but covered in fur instead of leather.
Harvard Law School professor Rebecca Tushnet, who represents Rothschild, argued that the term MetaBirkins is the title of a digital art project that comments on the relationship between consumerism and the value of art, and is therefore protected by the First Amendment.
Hermes attorney Oren Warshavsky said Rothschild used the name MetaBirkins as a trademark identifying the source of a product, leading consumers to mistakenly believe that MetaBirkins NFTs are related to Hermes.
The case is one of the first times a court has heard a dispute over how intellectual property law applies to NFTs. The new technology is at the heart of other trademark and copyright lawsuits involving Nike Inc. and Quentin Tarantino.
Warshavsky said neither party has made it clear what an NFT is or what it represents, but Tushnet argued that the digital images created by Rothschild are the only works that matter.
Tushnet said MetaBirkins NFTs are protected by the Second Circuit Rogers vs. Grimaldi test. This 1989 decision established that users of a mark are protected from infringement claims if their use is both an artistic expression and does not explicitly mislead consumers.
roger setting a high bar for what “explicitly misled” means, establishing that a “slight risk” of consumer confusion is outweighed by “the danger of restricting artistic expression,” Rothschild’s motion to dismiss said.
“He creates images of Birkins that don’t exist,” Tushnet said. “He challenges us to say: what is luxury? Why do you appreciate what you appreciate?
Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York questioned why the dismissal was necessary, noting that the roger the case was decided by summary judgment.
Tushnet said anything other than a dismissal would have a “chilling effect” on artists who want to represent famous brands but don’t have the money for a successful legal defense. She cited three other trademark cases that were decided on a motion to dismiss based on the roger test, which she says “provides all the necessary guidance here.”
Warshavsky said that roger The test does not apply because Rothschild engaged in a “line of conduct” that involved setting up an online storefront, webpage, and Twitter and Instagram handles with the MetaBirkins name in the purpose of selling digital goods.
The attorney cited an interview in which Rothschild said he wanted to replicate Birkin bags via NFTs. “It has nothing to do with the comments,” Warshavsky said.
And Rothschild couldn’t pass the roger test even if it applies, Warshavsky said, pointing to evidence of real consumer confusion. He pointed to media reports and industry conferences where people assumed MetaBirkins were products sold by Hermès.
Tushnet said the First Amendment allowed artists to profit from their work through marketing, which Rothschild had done with its website and social media accounts. the roger test indicates that expressive work, like MetaBirkins NFTs, is different from ordinary consumer products, she said.
Rakoff said he would provide a “final decision” by Friday on Rothschild’s motion to dismiss. He said he won’t have time to write a full opinion, which will come later.
Hermès is represented by Baker & Hostetler LLP. Rothschild is also represented by Lex Lumina PLLC.
The case is Hermes Int’l versus RothschildSDNY, No. 1:22-cv-00384, pleading dated 04/05/22.