Hermès vs Rothschild: The Battle Over METABIRKINS NFTs

The world of non-fungible tokens (NFTs) is about to enter the legal spotlight, as luxury goods company Hermès takes artist Mason Rothschild to court over the promotion and sale of a collection of 100 METABIRKINS NFTs. The trial, set to begin on Monday in New York, has raised important questions about the intersection of trademark law, free speech, and the emerging world of NFTs.

Hermès has accused Rothschild of trademark infringement, dilution, unfair competition, and cybersquatting for allegedly using the Hermès and Birkin trademarks without permission. Hermès claims that Rothschild's use of the METABIRKINS NFTs creates a likelihood of consumer confusion and unfairly capitalizes on the fame of the Birkin trademark. The company is seeking injunctive relief and monetary damages.

On the other hand, Rothschild argues that METABIRKINS is not a trademark, but rather the title of an art project and a series of 100 artworks that comment on the Birkin handbag. Rothschild's counsel claims that the adoption and use of the MetaBirkins name is protected free speech under the First Amendment and does not constitute trademark infringement or unfair competition.

The trial will likely center on the Polaroid factors, a test used by the Second Circuit to gauge the likelihood of consumer confusion. The factors include the strength of the Birkin trademark, the similarity of the parties' trademarks, the competitive proximity of the products, evidence of actual confusion, and the sophistication of the consumers in the relevant market, among others.

Hermès plans to present substantial evidence on each of the Polaroid factors, including its consistent use of the Birkin trademark over the past decades, over a billion dollars in sales of the Birkin handbag in the past 10 years, and millions of dollars in advertising. Hermès also plans to argue that Rothschild's use of the generic term "meta" creates the impression that Hermès is offering Birkin handbags in the metaverse and will show evidence of consumers, industry experts, and Rothschild's own agents and partners being confused about the source and nature of the MetaBirkins NFTs.

Finally, Hermès intends to offer survey evidence of confusion, with a survey conducted by its expert finding a net confusion rate of 18.7% among the NFT audience. Hermès also plans to introduce evidence of Rothschild's bad faith, including statements that allegedly demonstrate Rothschild's intention to make money by capitalizing on the fame of the Birkin trademark.

The MetaBirkins NFT trial will be a closely watched case in the world of NFTs and could set important precedents for trademark law and free speech in the digital age. Stay tuned for updates on this developing story.