The luxury brand’s triumph over an unauthorized digital Birkin bag creator may create a precedent for IP protections in the world of NFT.
Hermès International S.A., a French luxury goods company, won its case against the creator of unauthorized MetaBirkin NFT collectibles, which the company said were made without permission and broke its trademark for Birkin handbags.
According to Bloomberg Law, a Manhattan federal jury ruled in favor of Hermès on Wednesday. They gave the company $133,000 in damages and said that digital artist Mason Rothschild’s 100 MetaBirkin NFTs minted on Ethereum were not protected speech under the First Amendment.
The unofficial tribute to Hermès’s expensive handbags came out at the end of 2021. In December of that year, the firm said that the “NFTs infringe Hermès’s intellectual property and trademark rights.” In January 2022, the company sued Rothschild.
People think that this case could be an important early example for the NFT world, which is built on decentralized, permissionless platforms that anyone can use to sell digital items. An NFT is a blockchain token that can be used as a proof of ownership for both digital and physical items, like artwork and collectibles.
This model has presented new challenges for brands attempting to protect their IP from unlicensed NFTs that have flooded marketplaces as the industry has grown to generate approximately $25 billion in organic trading volume in each of the last two years.
Hermès is not the only company that is fighting back against unauthorised NFT duplicates of its real-world assets. Nike, for example, sued sneaker seller StockX last year for making unauthorized Nike-branded NFTs that could be redeemed for real shoes. These NFTs were digital claim tickets.
In some circumstances, centralized markets like major NFT platform OpenSea have had to develop copycat detection techniques to automatically stop claimed infringing goods from being sold through its storefront. NFTs are permanently on the blockchain and may be accessible through various marketplaces.
Rothschild said in court last week that the MetaBirkin bags were a “artistic experiment.” He said that he had made about $70,000 in royalties from the second sales of the digital bags, on top of the $450 in ETH he made from each sale of an NFT.
Hermès said in court that it plans to get into the NFT market, just like luxury brands like Louis Vuitton and Dolce & Gabbana. It also said that the MetaBirkin NFTs had caused confusion about its brand and products.
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