In November 2021, digital artist Mason Rothschild launched a collection of MetaBirkins, which are fuzzy, virtual purses with a small padlock that resemble Hermès’ iconic luxury Birkin bags. The MetaBirkins’ aesthetics were inspired by painters such as van Gogh, Rothko, and Kusama. They were uncommon, fashionable, and incredibly profitable. The first one was $42,000.
But they weren’t created by Hermès, and Rothschild announced on Instagram a month later that he’d gotten a cease-and-desist letter from Birkin’s real-world maker. In his defence, Rothschild used the First Amendment, claiming that it granted him “the freedom to make art based on my views of the world around me,” and comparing the selling of his MetaBirkins as NFTs to the sale of real art prints.
If the metaverse becomes the trillion-dollar economy that some predict, answers to problems like this one will be critical. What counts as protected artistic expression, and what is just virtual stolen products, when an NFT clone of a real-world thing can be made with a few keystrokes — and, critically, ascribed real-world value as digital property?
In January 2022, Hermès filed a lawsuit against Rothschild in the United States District Court for the Southern District of New York, alleging trademark infringement and dilution, false designation of origin, and cybersquatting, among other things. It’s a case that the Web3 world is keeping an eye on, and it’s already been used in other Web3 litigation that deal with how to reconcile digital artists’ freedom with copyright holders’.
The case, according to Mauricio Uribe, director of the software and IT practise at intellectual property and technology legal firm Knobbe Martens, is a “test” to assess “how effectively our present rules adapt” to the digital frontier.
He believes that if Hermès wins the day, not much will change. However, if Rothschild prevails, it will imply that there is “something distinctive to NFTs” that allows for “a new paradigm that warrants slightly different treatment” under the law.
The Rogers test is the key to it all: a two-pronged 1989 test that aims to reconcile artistic expression allowed by the First Amendment with the rights of the trademark proprietor.
The first component of the test merely asks if the trademark’s usage has any basic aesthetic relation to the object under consideration. The handbags have already passed this test: they’re charming and a bit humorous, and New York District Court Judge Jed Rakoff determined that digital photos of handbags may be considered creative expression. He claims that utilising an NFT to verify that digital picture and identify its future resale and transfer does not “turn the image into a commodity without First Amendment protection.” Essentially, NFTs created from digital art can still enjoy First Amendment protection as long as the remainder of the Rogers test is met.
The second component of the Rogers test is if the trademark “explicitly misleads as to the source or content of the work.” So the issue is, did Rothschild’s use of the “Birkin” moniker lead buyers to believe they were purchasing a premium item created by Hermès? That debate gets to the heart of whether the artist or the brand provides value in the digital environment.
Rothchild did himself no favours by claiming that the MetaBirkins were a “experiment” to see whether he could generate the “same type of illusion that it has in real life as a digital commodity” in a December 2021 interview with Alexis Christoforous on Yahoo Finance. Rothschild stated in the interview that the hysteria surrounding his virtual handbags was similar to the urge to own a Birkin handbag in real life. (We attempted to contact Rothschild numerous times for this piece but received no response.)
Rothschild’s words are used in Hermès’ case as proof of customer misunderstanding. It will be up to a jury to decide if it is sufficient to prevent him from selling his MetaBirkins at a trial scheduled for January 30, 2023 before Judge Rakoff.
According to Uribe, whose business represents corporate customers, when artists shift from creating digital art to selling it in the metaverse, the underlying good is “no longer just creative expression,” as Uribe said, but instead “has a function and is part of commerce.” That is the tipping point where “you’ve tilted the balance between First Amendment and trademark rules,” according to Uribe.
If Hermès can demonstrate that Rothschild’s use of the Birkin brand generated enough customer uncertainty about the actual thing, they will be able to halt the selling of these virtual luxury handbags, much like real-world counterfeits. If they lose, the metaverse gets to keep its MetaBirkins, which might pave the way for individuals to create their own Web3 Big Macs, Formula 1 racing teams, and Nike footwear, preparing the virtual scene for a new round of trademark battles.
It’s a piece of art. Hermès, as a fashion business, takes pleasure in promoting workmanship above all else. Hermès’ motto is ‘one artist, one bag,’ thus each Birkin is handcrafted from start to finish by a single artisan in one of their specialised ateliers, a procedure that takes roughly 40 hours in total.
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