The Birkin Bag Case — Precedent Verdict Pro Trademark and IP Protection in Virtual Worlds
By Yvonne Heinen-Foudeh, Senior International CorrespondentThe luxury design house Hermès International SA, Paris, has won the lawsuit against Mason Rothschild — the creator of the so-called MetaBirkins, a series of NFTs inspired by the Birkin bag. The LA-based digital artist introduced his virtual version of the accessory with cult status as part of a project Art Basel Miami back in 2021 and to no surprise caught immediate worldwide attention. With digitalization and extended reality becoming a strategic business component, at least globally present brands should pay attention to this case to see how they may be in a position to navigate through similar cases.
In 2021, Rothschild debuted about one hundred MetaBirkins NFTs in multiple colorways and styles. Prices for these digital assets ranged from hundreds of dollars up to hundreds of thousands, depending on the design. Hermès estimated that US$1.1 million was brought in from the sales of these MetaBirkins NFTs. For comparison: a physical Birkin bag can cost US$9,000 – US$400,000.
The proceedings of the court challenge involved a test that required jurors to determine whether or not Rothschild’s NFTs were considered a form of artistic expression. The premise of this lawsuit is predicated on the rights one has under the U.S. Constitution’s First Amendment, which the artist is contesting to be protected. And Hermès’ trademark does not extend to the MetaBirkins as these digital assets were constitutionally protected and Rothschild was only trying to make a statement about conspicuous consumption.
To support Rothschild’s defense, the lawyers compared the case to that of Andy Warhol using Campbell cans and Coca-Cola bottles in his artworks albeit “in the stylized but plainly recognizable form”. But in response, Hermès’ legal team said the artist was “stealing the goodwill in Hermès’ famous intellectual property to create and sell his own line of products.”
The court followed the submissions of the Hermes lawyers: According to the verdict by the U.S. District Court for the Southern District of New York for trademark infringement and dilution, Hermès will be awarded US$110,000 for trademark infringement and brand dilution, and US$23,000 in statutory damages for cybersquatting.
The verdict is more than just compensation of damages as it sets the precedence for future court rulings of how at least US intellectual property rights are applied to digital assets. The victory of Hermès in the case is considered a significant win for brands in the virtual reality.
The House of HermèsHermès started as and still is today a family business with about 80% of shares owned by the family (the remaining shares are owned by the LVMH Group after French multi-billionaire Bernard Arnault recently bought into the family dynasty in secret). It had been founded in 1837 by Thierry Hermès, born in Krefeld, Germany, to a French father and a German mother. The family moved to Paris, France in 1828, where Hermès first established a horse harness and later saddlery on manufacturing. Reference to those early days in modern times and into the present: The Duc-carriage-with-horse logo the company acquired in the 1950s.
Today, the US$ 9 billion business maintains 14 product divisions that encompass the legendary 90 x 90 square silk scarves, ties, men's and women's wear, perfume, watches, stationery, enamelware, decorative arts, tableware, jewelry, and leather goods. Talking bags: Another one having achieved cult status, amazing price tags, and long waiting lists for ordering the legendary “Kelly bag”, named after the American actress Grace Kelly, later Monégasque princess Gracia Patricia.
The list of designers having created for Hermès over the decades includes Jacques Delahaye, Catherine de Karolyi, Monsieur Levaillant, Nicole de Vesian, Eric Bergère, Claude Brouet, Tan Giudicelli, Marc Audibet, Mariot Chane, Bernard Sanz, Martin Margiela, Jean-Paul Gaultier, and Christophe Lemaire.