U.S. Federal Court Granted Hermès to Permanently Ban ‘MetaBirkin’ NFT Sales

U.S. Federal Court Granted Hermès to Permanently Ban ‘MetaBirkin’ NFT Sales

A Manhattan Federal Court has ruled in favor of luxury retailer Hermès’ plea to permanently stop the defendant/artist Mason Rothschild’s sales of ‘MetaBirkin’ non-fungible tokens (NFT) after a jury found that they infringed upon the French brand’s trademark rights of the famed Birkin bags.

According to U.S. District Judge Jed Rakoff, the permanent injunction was necessary because Rothschild’s ongoing promotion of the NFTs would probably confuse consumers and irrevocably injure the company. The judge also denied Rothschild's requests to throw out the verdict or hold a new trial.

The Court observed, “Defendant's entire scheme here was to defraud consumers into believing, by his use of variations on Hermès' trademarks, that Hermes was endorsing his lucrative MetaBirkins NFTs. Nothing in the First Amendment insulates him from liability for such a scheme.”

NFTs are unique tokens on blockchain networks that are often used to verify ownership of digital art.

The fashion house Hermès first sued Rothschild in 2022 over his ‘MetaBirkins,’ NFTs associated with images depicting the bags covered in colorful fur.

The trial was one of the first to ascertain as to how NFTs intersect with intellectual-property law and free-speech protections for art.

Hermès accused Rothschild to be a ‘digital speculator’ and called the NFTs as ‘get rich quick’ scheme that infringed its ‘Birkin’ trademark and created the false impression that the fashion house endorsed the tokens.

Sonny Estival (legal name of Rothschild), retaliated that the works were an absurdist statement on luxury goods and immune from the lawsuit based on protections in the 1st Amendment of the U.S. Constitution for art that uses trademarks in an artistically relevant way without explicitly misleading consumers.

However, the judge ruled for Hermès in February and awarded the company $133,000 as damages.

Nevertheless, Hermès in a lawsuit filed in March pointed out the fact that Rothschild continued to market his NFTs after the jury's verdict.

It requested before the Court to impose a ban and to turn over his remaining tokens and post-trial profits.

Rothschild pleaded before the Court that Hermès request went ‘far beyond what is appropriate in a case, like this one, that involves artistic expression.’

Nonetheless, Rakoff largely granted Hermès request, but decided not to order Rothschild to transfer the tokens out of an ‘abundance of caution’ for 1st Amendment concerns.

Hermès was represented by Gerald Ferguson, Deborah Wilcox and Oren Warshavsky of Baker & Hostetler.

While Rothschild was represented by Rhett Millsaps, Christopher Sprigman, Mark McKenna and Rebecca Tushnet of Lex Lumina.

Rothschild also received litigation support from Jonathan Harris and Adam Oppenheim of Harris St. Laurent & Wechsler.