- On January 14, 2022, French luxury designer Hermès filed a lawsuit against artist Mason Rothschild, in the Southern District of New York, for various trademark claims over his sale of “MetaBirkin” NFTs mimicking Hermès Birkin bags. This was no surprise.
- It was expected after Rothschild created and sold out his 100 “MetaBirkin” NFTs during Art Basel week in Miami back in December 2021. Rothschild’s NFTs reportedly sold over $1.1 million in volume. (Hypebeast)
- The MetaBirkin NFTs depict the shape of the iconic Birkin bag of Hermès but with faux fur (in a two-dimensional digital image). [Our story about the sale – click here.]
- Hermès’ Complaint alleges:
- “Defendant’s widespread use of the METABIRKINS mark constitutes trademark infringement and dilution of the famous BIRKIN Mark. The METABIRKINS NFTs feature the distinctive design of the BIRKIN handbag, which in conjunction with the use of the METABIRKINS Mark, adds to the likelihood of confusion and dilution. While Hermès has not yet minted and sold its own NFTs, this is a new and burgeoning marketplace. Consumers see a wide variety of brands, including luxury fashion brands exploiting the NFT space and would expect that NFTs featuring famous brands are affiliated with those brands, or wonder why the famous brands are permitting such dilutive use of their valuable assets and think less highly of them.”
- Perhaps the only surprise was that Hermès’s complaint, filed by Baker & Hostetler LLP on behalf of Hermès, does not include a copyright infringement claim. Not to say that a copyright infringement claim would be successful, but it would probably be at least sufficient to survive a motion to dismiss. We gave some initial thoughts on three issues that would be contested under copyright (if a claim were made): (1) whether the Birkin bag design is copyrightable under the Star Athletica test (probably, although contestable), (2) if so, whether Rothschild copied any copyrightable element of the bag in copying the bag’s shape (debatable, perhaps doubtful), and (3), assuming Rothschild did copy a copyrightable element of the Birkin bag design, whether Rothschild’s copying was a fair use (parody or otherwise) (debatable). [Our analysis of a potential copyright claim – click here.]
- Rothschild tweeted a reply to Hermès complaint.
- Earlier, in response to Hermès’ cease and desist letter, Rothschild also asserted that his MetaBirkin NFTS are commentary on Birkin bags: “MetaBirkins is a playful abstraction of an existing fashion-culture landmark. I re-interpreted the form, materiality and name of a known cultural touchpoint. MetaBirkins are also a commentary on fashion’s history of animal cruelty, and its current embrace of fur-free initiatives and alternative textiles.” [Click here.]
- Our Second Take on the Lawsuit: Before the lawsuit was filed, we gave some preliminary thoughts about potential trademark claims that anticipated the possible defense of parody based on the Fourth Circuit’s decision in Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 260-269 (4th Cir. 2007) (“Chewy Vuitton” dog chew toys were permissible parody of Louis Vuitton trademarks). [Read our analysis – click here.]
- A parody defense may still be raised, but, now that the complaint has been filed and Rothschild tweeted two responses invoking the First Amendment, we think the main line of defense may be the balancing test for artistic uses of trademarks under Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989). In the context of the unlicensed use of the name “Ginger” (for the actress Ginger Rogers) in a fictional movie title Ginger and Fred, the Second Circuit explained the test:
- The Lanham “Act should be construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression. In the context of allegedly misleading titles using a celebrity’s name, that balance will normally not support application of the Act unless
- [1]the title has no artistic relevance to the underlying work whatsoever, or,
- [2] if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.”
- The movie, directed by Italian film-maker Federico Fellini, was about two fictional dancers who imitated Ginger Rogers and Fred Astaire. Applying the Rogers test, the court held that:
- The use of “Ginger” in the movie title had some artistic relevance because the character in the movie, a dancer, was nicknamed “Ginger.”
- The title “Ginger and Fred” did not explicitly mislead because “[t]he title ‘Ginger and Fred’ contains no explicit indication that Rogers endorsed the film or had a role in producing it.”
- The novel aspect of the Hermès v. Rothschild case is that it involves NFTs, which are virtual tokens on blockchain and typically not the artistic work associated with the tokens. It’s likely that courts will try to analogize NFTs to some prior cases. But which ones?
- There is a long line of cases applying the Rogers v. Grimaldi test to unlicensed use of trademarks in video games. See E.S.S. Ent. 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095 (9th Cir. 2008) (permissible use of “The Play Pen” in Grand Theft Auto video game).
- For an excellent summary of video game cases, see William K. Ford, Restoring Rogers: Video Games, False Association Claims, and the “Explicitly Misleading” Use of Trademarks, 16 J. Marshall Rev. Intell. Prop. L. 306 (2017).
- The video game cases applying Rogers tend to find some artistic relevance in the use of trademarks. Professor Ford argues, however, that courts have inconsistently applied three different versions of the Rogers test–one as a dispositive test, one as an additional factor on top of the likelihood of confusion analysis, and one that equates–or conflates–“explicitly misleading” with likelihood of confusion, which Prof. Ford argues is just wrong under trademark law. Id. at 315.
- The first version of Rogers is more favorable to Rothschild: he can argue his use of Birkin’s trademark and bag design have artistic relevance and do not explicitly mislead as the source (though the latter issue is likely to be contested by Hermes). The second version, in which likelihood of confusion is also considered, might shift the advantage to Hermès, which argues “[c]onsumers see a wide variety of brands, including luxury fashion brands exploiting the NFT space and would expect that NFTs featuring famous brands are affiliated with those brands.”
- Of course, a visual image associated with an NFT is not a video game. And the unlicensed use of the trademarks for the mark “Birkin” and the bag’s trade dress comprise more of the MetaBirkin NFT than simply the use of a trademark within the greater context of a video game. That difference might tip the courts’ view to consider the Ninth Circuit’s analysis in Gordon v. Drape Creative, Inc., 909 F.3d 257 (9th Cir. 2018). The case involved the unlicensed use, on greeting cards, of trademarked phrases from a popular “Honey Badger” YouTube video. The court distinguished uses of trademarks in “in the creation of a song, photograph, video game, or television show” versus use in a greeting card that was minimally expressive:
- “The Rogers test is not an automatic safe harbor for any minimally expressive work that copies someone else’s mark. Although on every prior occasion in which we have applied the test, we have found that it barred an infringement claim as a matter of law, this case presents a triable issue of fact. Defendants have not used Gordon’s mark in the creation of a song, photograph, video game, or television show, but have largely just pasted Gordon’s mark into their greeting cards. A jury could determine that this use of Gordon’s mark is explicitly misleading as to the source or content of the cards.”
- “A second consideration relevant to the ‘explicitly misleading’ inquiry is the extent to which the junior user has added his or her own expressive content to the work beyond the mark itself. As Rogers explains, the concern that consumers will not be ‘misled as to the source of [a][909 F.3d 271]product’ is generally allayed when the mark is used as only one component of a junior user’s larger expressive creation, such that the use of the mark at most “‘implicitly suggest[s]’ that the product is associated with the mark’s owner. Id. at 998-99; see MCCARTHY § 31:144.50 (“[T]he deception or confusion must be relatively obvious and express, not subtle and implied.”). But using a mark as the centerpiece of an expressive work itself, unadorned with any artistic contribution by the junior user, may reflect nothing more than an effort to “induce the sale of goods or services” by confusion or “lessen[] the distinctiveness and thus the commercial value of” a competitor’s mark. S.F. Arts & Athletics, Inc. v. U.S. Olympic Comm.,483 U.S. 522, 539, 107 S.Ct. 2971, 97 L.Ed.2d 427 (1987).”
- Even if the court in New York considers this Ninth Circuit approach from Gordon, Rothschild can still argue that his digital image has more artistic expression–e.g., the faux fur–than a greeting card and is more like the photograph mentioned in the case. Although the Birkin bag design does appear to be the centerpiece of the MetaBirkin NFT, Rothschild has “adorned” it with faux fur, adding his own expression on top of the Birkin bag shape.
- What about Campbell Soup cans and Andy Warhol? Rothschild has used the example of Andy Warhol painting Campbell soup cans as an example of the artistic license the First Amendment protects. In the response, Rothschild says “the First Amendment gives me the right to make and sell art that depicts Birkin bags, just as it gave Andy Warhol the right to make and sell art depicting Campbell’s soup cans.”
- Great example. But what might be different about Rothschild’s unlicensed use of Hermes’ trademark and trade dress is that, unlike Campbell Soup, which was not likely to enter the field of pop art painting, Hermès will likely create and sell its own NFTs, including potentially for Birkin bags. Virtually every elite fashion brand (e.g., Burberry, Coach, Dolce Gabbana, Gucci, Ralph Lauren, Louis Vuitton, Prada, Balenciaga) is already doing so. [See our analysis of fashion brands’ NFTS – click here.] So if likelihood of confusion is analyzed (under the second version of the Rogers test in Prof. Ford’s article), then Hermès has a much stronger argument of a likelihood of confusion than Campbell’s soup would have had against Warhol. There seems no doubt Hermès will enter the NFT market eventually, joining the other high fashion brands already in the market for NFTs. If a likelihood of confusion, it must be considered against the First Amendment interest in the artistic expression. In a case that follows the Rogers test plus considering likelihood of confusion (what Prof. Ford calls Rogers II), the Second Circuit said: “the finding of likelihood of confusion must be particularly compelling to outweigh the First Amendment interest recognized in Rogers.” Twin Peaks Productions, Inc. v. Publications Intern., Ltd., 996 F.3d 1366, 1379 (2d Cir. 1993).
- As you can tell, the case raises complex issues. Because courts have devised variations of the Rogers test, one key issue will be: which version of Rogers will the court adopt?
- From a law professor’s perspective, a fascinating case involving a new technology and new market for NFTs . The stakes are high. Many other big brands are watching closely, along with NFT creators. Indeed, this is the type of case I wouldn’t be surprised to see before the U.S. Supreme Court one day. Because the Rogers test is a doctrine that is completely court-made in balancing the First Amendment interest with the application of the Lanham Act, and because the lower courts have devised different versions of Rogers, the Supreme Court might want to weigh in on what the correct test is. Plus, the facts are fascinating, NFTs are a hot new technology, and a lot of money for big brands potentially rides on the decision, not to mention resolving the conflict between the freedom of artistic expression and trademark protection.