Hermès won its lawsuit against Mason Rothschild. What happens now?

A few weeks ago, we caught you up on the legal battle between Hermès and MetaBirkins creator Mason Rothschild that started about a year ago.

ICYMI, Rothschild created an Hermès-inspired range of NFTs called MetaBirkins that sold for thousands of $$. Hermès claims it constituted a trademark violation, while Rothschild said it was simply a matter of artistic expression.

Both sides delivered their closing arguments in the trademark infringement trial over the past week. The Hermès team maintained Rothschild just wanted to “cash in” on its brand name, and Rothschild countered that MetaBirkin is an “artistic experiment” protected by the First Amendment. On Wednesday, the jury declared that Rothschild had indeed violated Hermès’s trademark and awarded the luxury brand $133,000 in total damages. It also determined that NFTs did not qualify as protected speech.

How did this happen?

Speaking to Retail Brew before the verdict came down, Terence Ross, partner at Katten Muchin Rosenman LLP, said there could have been too many inconsistencies in Rothschild’s argument. “Before the lawsuit was filed…[he said] he intended to pay tribute to the iconic Birkin bag, [which] has very little to do with art, and lots of references to wanting to make money off this,” he told Retail Brew. “So his message has changed over time. And that inconsistency in messaging was pointed out in court during the trial, and most jurors hold inconsistencies against [you]; they think if you’re changing your tune on a regular basis, there’s something wrong with your position.”

What’s next?

This, however, doesn’t mean it’s all over for Rothschild. Even though the jury sided with Hermès, the case could be appealed in the Supreme Court. In fact, the Supreme Court is currently looking at a trademark dispute between Jack Daniels and VIP Products that created a chew toy for dogs resembling the Jack Daniels bottle. The case may set a precedent for freedom of expression versus commerce, according to lawyer Susan Scafidi, who is also founder and academic director of the Fashion Law Institute at the Fordham University School of Law.

“I was a little surprised that the judge wanted to move forward with [the Hermès] case, given that the Jack Daniels case was patented,” she told Retail Brew. “Whatever the Supreme Court says in Jack Daniels is going to be very instructive for this case. Ultimately, everyone who is watching the MetaBirkin case should also have their eyes on Jack Daniels.”

Even before the verdict was announced, the case had the potential to be a defining one for luxury and how the First Amendment applies in cases where digital assets are involved. “In the past, big companies like Hermès let a lot of this go because they weren’t dealing with NFTs; they were dealing with one-off paintings hanging in downtown galleries or sold on the sidewalks of SoHo,” Scafidi said, adding that the case could determine if in the future, NFTs would be controlled by brands themselves or independent artists that “borrow” those trademarks for their own work. “And that is a really big question: How often do we get a brand new product category overall, never mind in the fashion and luxury space?” she said.—JS