Hermès and Rothschild’s MetaBirkins Fight Heads to the Second Circuit

The trademark battle between Hermès and Mason Rothschild over the latter’s MetaBirkins non-fungible tokens (“NFTs”) is not over. Following a February 2023 jury verdict that found that Rothschild infringed Hermès’ Birkin trademark by way of his MetaBirkins project, the case is playing out before the U.S. Court of Appeals for the Second Circuit. Rothschild’s appeal, which is being argued today, challenges the jury’s February 2023 verdict, as well as key legal rulings made by the U.S. District Court for the Southern District of New York, including the court’s application of various legal tests that Rothschild says should have shielded him from liability because his use of the Birkin name was artistically relevant and not misleading.

A Bit of Background: After months of litigation, Hermès scored a victory in New York federal court in early 2023 when a jury determined that Mason Rothschild’s MetaBirkins NFTs violated its trademark rights. According to the jury, Rothschild’s MetaBirkins – which consist of 100 NFTs tied to digital images depicting fur-covered versions of Hermès’ famous Birkin handbag and initially sold for $450 – created a likelihood of consumer confusion and were intentionally designed to mislead the public into believing Hermès was associated with the project when no such partnership existed.

Rothschild’s appeal, which was initiated in November 2023, brings various arguments to the appellate court. In addition to the jury verdict, counsel for the artist or the “digital speculator who is seeking to get rich quick by appropriating the [Hermès] brand,” depending on which side you ask, is challenging Judge Jed Rakoff’s rulings, as well. In particular, Rothschild argues that the district court erred in its application of the Rogers v. Grimaldi test, stating that the title “MetaBirkins” has “incontrovertible artistic relevance to the MetaBirkins images,” and as a result, his use of the term should not be deemed infringing. 

Rothschild contends that the court improperly focused on his intent to profit from Hermès’ goodwill, refusing to dismiss the case because Hermès alleged that he “entirely intended to associate the ‘MetaBirkins’ mark with the popularity and goodwill of Hermès’ Birkin mark, rather than intending an artistic association.” The MetaBirkins-maker also emphasizes that under Rogers, “there has never been any plausible allegation, let alone evidence, that Rothschild’s use of the MetaBirkins title was explicitly misleading.”

He goes on to challenge the exclusion of his expert witness, art critic Dr. Blake Gopnik, stating that “Gopnik’s opinion was based on his understanding of the artistic conventions Rothschild worked within.” Rothschild argues that “without Gopnik’s testimony, the jury was left at sea to determine alone if Rothschild’s conduct was consistent with his stated intentions.”

Additionally, Rothschild raises a broader legal argument based on the U.S. Supreme Court’s decision in Dastar v. Twentieth Century Fox, claiming that trademark law does not apply to intangible goods like NFTs. He contends that because NFTs are digital assets, Hermès’ claims of trademark infringement are legally unfounded.

Hermès’ Answer

In a brief that it filed in February, Hermès argues that the district court was correct in ruling against Rothschild, asserting that his use of the Birkin name was not artistic expression but “a calculated effort to mislead consumers and capitalize on the Birkin brand’s immense value.” Hermès asserts that Rothschild’s actions were commercially driven and intentionally designed to create confusion, as evidenced by media coverage and consumer inquiries that linked MetaBirkins to Hermès. The French luxury goods company argues that Rothschild’s use of the Birkin mark was “explicitly misleading” and falls outside the protections offered by Rogers.

Hermès maintains that Rogers does not apply in the case at hand because Rothschild’s use of the mark “was not simply part of an artistic work but instead functioned as a brand,” going on to cite the U.S. Supreme Court’s ruling in Jack Daniel’s Properties v. VIP Products LLC, which clarified that the Rogers test does not apply when trademarks are used for source identification. Hermès argues that Rothschild’s use of the “MetaBirkins” name as the brand for his NFTs is a clear example of source identification.

As far as expert witnesses go, Hermès claims in its February 2024 brief that the exclusion of Rothschild’s expert was appropriate because his testimony “lacked reliable methodology.” Counsel for the company also defends their own expert, Dr. Scott Kominers, who testified that the MetaBirkins NFTs were “solidly within the digital brand submarket” because Rothschild “explicitly created various forms of utility around the NFTs.”

Finally, Hermès dismisses Rothschild’s reliance on the Supreme Court’s Dastar decision, arguing that “Dastar is inapplicable to this case” as it concerned copyright issues related to tangible goods, not trademark law in the digital realm. Ultimately, Hermès contends that trademark law applies fully to digital products and that Rothschild’s actions constitute trademark infringement, dilution, and cybersquatting.

Second Circuit Arguments

A panel of judges for the Second Circuit focused on the application of the Rogers test during arguments on Wednesday, with Senior U.S. Circuit Judge Pierre Leval saying that SDNY Judge Jed Rakoff may have instructed the jury “improperly” when it comes to the Rogers test (and specifically, the role of Rothschild’s intent). This is one of the critical points that counsel for Rothschild has raised, arguing in an earlier filing that it “was improper [for the court] to instruct the jury that it could deny [his] First Amendment protections based on an unguided and impermissible assessment of his intent.” And had the Rogers test been correctly applied, “Mr. Rothschild’s MetaBirkins artworks are protected by the First Amendment, and all of Hermès’ claims must be rejected as a matter of law,” his counsel argued.

While the panel seemed to weigh in favor of Rothschild, in part, commenting on how Hermès’ win could negatively impact artists’ ability to engage in commentary, they also questioned the extent to which Rothschild may have used Hermès’ trademark-protected branding to piggyback on the well-established appeal of the company and its Birkin bag.

THE BIGGER PICTURE: The case has been closely watched for its potential implications “regarding the ability of third parties to use trademark owners’ brands as a source of inspiration for their own goods and services and the promotion of the same online,” Norton Rose’s Felicia Boyd stated in a note. While the First Amendment “may have a role in this analysis, that role will likely depend on the specific nature of the third party’s goods, intent, and their efforts to promote the same.”

The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).