Finnegan, Henderson, Farabow, Garrett & Dunner LLP
10/31/2024 | Press release | Archived content
MetaBirkins Appeal Resurrects ‘Fair Use’ NFTs Debate
A U.S. appeals court is revisiting the case between Hermès and artist Mason Rothschild over the creation of 'MetaBirkins' NFTs, alleging trademark infringement. Rothschild had previously been found to have infringed Hermès' trademarks by creating NFTs inspired by Hermès' Birkin bags.
During an October 23 session, a U.S. Court of Appeals for the Second Circuit judge suggested that the district judge may have misled the jury, potentially affecting artistic freedom under the First Amendment. Finnegan partner Mark Sommers told World IP Review that the New York jury "comprised ordinary citizens who weighed the evidence and decided that defendant Rothschild's story of artistic creation and social criticism was a cover scheme to make a quick buck off the plaintiff's well-known Birkin handbag.'"
He further added, "Riding the wave of NFT fad, documents revealed Rothschild's motives were targeted at cashing in on Hermès' iconic bag, as opposed to expressive artwork."
Now that the case is under appeal, questions are being raised about the balance between trademark rights and artistic freedoms. Mark noted that senior U.S. Circuit Judge Pierre Leval appeared "receptive" to Rothschild's claim of being "an artist, though an admittedly aggressive one" raising questions about whether District Judge Jed Rakoff had correctly applied the Rogers test when considering Rothschild's intent.
This case's significance touches on broader issues of trademark law and the First Amendment. "This case is relevant to all prominent brands, not just luxury brands," said Mark.
He added that the Supreme Court's ruling in Jack Daniel's Properties v. VIP Products, which clarified that "if the defendant's alleged infringement consists of using the plaintiff's mark as part of the defendant's trademark, the First Amendment protections afforded under the Rogers test do not apply."
"That said, this will not be the first time the Second Circuit closely looks at its Rogers decision in a post-Jack Daniel's context," Sommers explains.
"It has already done so in Vans v. MSCHF last December, when it held that Jack Daniel's foreclosed MSCHF's argument that Wavy Baby's parodic message merits higher First Amendment scrutiny under Rogers."
Mark continued: "MSCHF had used Vans' marks in much the same way that VIP Products used Jack Daniel's marks-as source identifiers."
"The Second Circuit is prepared to pay due respect to SCOTUS's Jack Daniel's holding as it pertains to application of the Rogers test for expressive works under the First Amendment."
According to Mark, luxury brands like Hermès retain avenues to defend their trademarks, contingent on how the defendant uses the brand's trademarks and trade dress.
However, he notes: "Rights holders still must prove trademark infringement even if such claims are not foreclosed under Rogers."
Mark noted that similar issues are already emerging in other industries.
"The Vans v. MSCHF case involved shoes, and last month's California federal court jury verdict in MGA Entertainment v. OMG Girlz involved dolls," he points out, adding that these represent only the "tip of the iceberg."