MetaBirkin NFT Judge Releases Reason for Denying Pretrial Wins

US District Judge Jed S. Rakoff, who is overseeing a novel trademark dispute between Hermès International SA and a conceptual artist who sold digital “MetaBirkin” NFTs, released an opinion on the fourth day of trial describing his reasons for sending the dispute before a jury.

The Rogers test, a legal balancing test that weighs free speech and trademark rights, is the “governing framework” for the case, Rakoff wrote in his Thursday decision. Only a jury can resolve the factual disputes in the nonfungible tokens case required for Rogers test evaluation, he said.

Rakoff, who sits for the Manhattan-based South District of New York, denied both parties’ motions of summary judgment late last year in a one-page order. He had previously told Hermès and Los Angeles-based artist Mason Rothschild that he would publish his opinion by Jan. 24.

Hermès is arguing at trial that the MetaBirkin NFTs, which depict digital images of Hermès’ iconic Birkin luxury handbags covered in fur, violate trademark laws by duping consumers into believing the NFTs come from Hermès.

Rothschild has countered that the NFTs are works of art protected by the First Amendment.

The Rogers test, first defined in the 1989 decision in Rogers v. Grimaldi, established that trademarks can be used in an expressive work without the brand’s authorization as long as it meets a minimal level of artistic relevance and doesn’t explicitly mislead consumers.

Rakoff’s 26-page opinion determined that the Rogers test does apply because the digital images depicting Birkin bags covered in animated, colorful fur “suggest that they were originated as a form of artistic expression.” Some of the bags have more complex designs, such as the Mona Lisa and a painting by the artist Bob Ross.

The judge had said in an opinion released last May that the test likely applies, but he needed additional evidence to evaluate it.

However, just because the test applies doesn’t mean Rothschild’s MetaBirkins pass it, Rakoff wrote in his latest opinion.

While the artist presented evidence from media interviews saying that the MetaBirkin project was a “vehicle to comment on the Birkin bag’s influence on modern society,” Hermès pointed to personal text messages that suggest the artist was looking to cash in on the Birkin brand name.

“A reasonable juror could conclude that Rothschild’s claims that he viewed MetaBirkins as a largely artistic endeavor is a fabrication,” Rakoff wrote.

The parties also “disagree vehemently” about confusion among consumers. Hermès commissioned a study finding a net confusion rate of 18.7% among potential NFT buyers, but Rothschild’s attorneys have objected to the study’s methods.

Hermès is represented by Baker & Hostetler LLP. Rothschild is represented by Lex Lumina PLLC and Harris St. Laurent & Wechsler LLP.

The case is Hermes International SA v. Rothschild, S.D.N.Y., No. 1:22-cv-00384, 2/2/23