Trademarks in the metaverse Case 1 Hermès vs Artist Mason Rothschild

The Summary of Facts:

Hermès is a celebrated and luxurious French brand. The Company has ownership of both Hermès and Birkin brands. Moreover, Birkin is the most favorite bag of the customers, being also one of theworld's most valuable brand at the vogue. At the end of 2021, the Artist Mason Rothschild presented “The Metabirkins”, a 100-piece NFT digital products images at the metaverse without any authorization from the Hermès. Its profile looked like artificial leather, the origins of the Hermès Birkin bag. They’re selling through on Twitter, Instagram, Discord and Metabirkinds.com for selling online at a price of US$450 per piece.

After Hermès was aware of this situation, Hermès has considered this behavior had infringed and diluted its trademark rights and might to impede Hermès to access NFT market. Besides, they also applied for registration of website “metabirkins.com” illegal bad faith, so it has become an unfair method of competition. Under the circumstances, Hermès acted against artist Mason Rothschild.

Image source: Intellectual Property Office

Ministry of Economic Affairs, R.O.C.

Data source: Hermes International v. Rothschild (1:22-cv-00384-JSR)

Image source: Sotheby’s auction website.

However, we are curious how the jury determined the infringement of Meta trademark. After understanding the case, we tried analyzing the reasons of the said judgment as follows:

1. The said jury thought that “MetaBirkin” NTFs is just a consumer’s product and is not a pure artistic invention. Obviously, such product has caused the consumers to doubt whether or not it is produced under authorization or license by Hermés.

2. The said jury also thought the product in NFT is just a physical consumer’s, product, so it should be also subject to the trademark law in order to avoid legal loophole and protect the trademark counterfeited party or the party that is going to use the goodwill of somebody else from infringement.

The said jury also thought that “MetaBirkin” NTFs created by Mason

Image source: Attached to the Hermes v. Rothschild case.

On February 8, 2023, a Jury in New York State Courtfor Federal Court in Manhattan, Hermès argued that the MetaBirkin NFTs infringed on its BIRKIN trademark, considered that “MetaBirkin” NTFs created by the Artist Mason Rothschild without authorization Hermès Birkin bag of the brand trademark infringement the Hermès Trademark Rights and the concept of a trademark that

is distinctive; as a result, they should compensate Hermèscompensate for US$133,000 (equivalent to NT$4,120,000). Besides, Mason Rothschild asserted that “MetaBirkin” NTFs is just comes up with ironic inventions artist , but it as unacceptable, they said by the court.

Invalid Assertion of Artistic Invention:

The Artist Mason Rothschild asserted that legal protection for an invention by patent law, as the first amendment to American Constitution has conferred and protected its people to gives you the right to express them freely. Mason Rothschild thought that “MetaBirkin” NTFs is an invention that an artist observed and touched the surroundings and an inventive work sold by an artist, so it should be an artistic invention. The commercial profit earned by the artist therefrom should be completely legal and should be properly protected by free artistic invention rights.

Mason Rothschild explained by taking Andy Warhol as example. Andy Warhol took the routine matters as his inventive elements, so he created Compbell’s Soup Cans paint series. Andy Warhol expressed pop arts by means of such paint series, so he became a noted contemporary American artist. The concept of “MetaBirkin” NTFs created by Mason Rothschild is just like Compbell’s Soup Cans paint series created by Andy Warhol.

Image source: Sotheby’s auction website.

However, we are curious how the jury determined the infringement of Meta trademark. After understanding the case, we tried analyzing the reasons of the said judgment as follows:

The said jury also thought that “MetaBirkin” NTFs created by Mason

Rothschild is just to misappropriate Hermés goodwill so as to increase the value of her product.

The Defendant Mason Rothschild told her colleague that she wanted to earn big money by hyping “MetaBirkin” NTFs in media, so they thought such trademark was used in bad faith.

Before the said jury made decision, the trial judge also made use of Rogers Test and Polaroid Factors and explained how to judge if the trademark has been infringed in order to conclude therefrom.

Rogers Test:

Rogers Test was taken as a balanced judgment basis between rights scope of trademark and thinking expression of an artistic invention. This test is originated from case Rogers Grimaldi. This case produced the examination standards in order to see whether or not if could give people’s free expression rights as given and protected by the First Amendment to American Constitution, then it is considered as the artistic expression and reasonable use without any problem in regard to trademark infringement. It shall mean that if there is no any correlation or there is no obvious misleading about the sources and contents of the product to the consumers between use of other’s trademark and artistic expression, it shall be confined by the trademark law.

Polaroid Factors:

It is originated from Polaroid. v Polarad Elecs. The principal purpose is to judge eight factors if it might cause the consumers to mislead or confuse between two trademarks:

Strength and weakness relating to distinctiveness of Hermés trademark;
If it is similar and the similar extent between “Birkin” trademark of Hermés and “MetaBirkin” trademark;
If the commodity/service is similar and the similar extent;
Possibility of diversification of the prior right owner;
If the customer has confused or mislead the relationship between “Birkin” trademark of Hermés and “MetaBirkin” trademark;
Commodity/Service quality between “Birkin” and “MetaBirkin”;

If the Defendant Mason Rothschild used the trademark in good faith; and
The relevant consumer’s extent of similarity to the respective trademarks.

After using Rogers Test and Polaroid Factors, the said jury considered that the “MetaBirkin” NTFs is not purely an artistic invention, but it has caused the consumers to confuse the origin of the product or they thought there might be co-branding or authorization relations; as a result, they determined that “MetaBirkin” NTFs and domain name metabirkins.com have infringed rights and interests and business profit of Hermés trademark and should compensate losses of Hermés.

Afterwards, Hermés exploited the victory to apply for the injunction with the court to prohibit selling “MetaBirkin” NTFs forever. The court permitted the request of Hermés on June 23 by issuing an injunction. The court not only ordered Mason Rothschild to advise the results of judgment to the consumers that bought “MetaBirkin” NTFs before, but also assign the domain name metabirkins.com to Hermés before July 15.

The results of judgment of the case are doubtless a shot in the arm with regard to trademark protection, so the trademark owner would never worry if his trademark rights have been protected perfectly. Moreover, the celebrity might be one of factors relating the success of Hermés; consequently, we shall unceasingly take note of Meta trademark protection cases of all countries in order to understand the difference of trademark protection scope of the respective countries.

Meanwhile, in order to respond change of technology in new era, all countries have one after another rendered suggestion manual for the protection of Meta trademarks. The Intellectual Property Office had added the following commodities/services for the virtual commodities. We hereby suggested filing trademark registration relating to “Virtual Commodities” in due course in order to actually protect your own rights and interest of trademarks.

Image source: Intellectual Property Office

Ministry of Economic Affairs, R.O.C.

Data source: Hermes International v. Rothschild (1:22-cv-00384-JSR)

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