HERMES INTERNATIONAL and HERMES OF PARIS v. "MASON ROTHSCHILD" a/k/a SONNY…

Background

Hermès International and Hermès of Paris, Inc. claimed trademark rights in the “Birkin” name and in the design and visual features of the Birkin handbag. Mason Rothschild created and sold 100 MetaBirkins non-fungible tokens, or NFTs. Each NFT was associated with a unique digital image of a Birkin-style handbag covered in faux fur. The NFTs sold for more than $1.1 million through June 2022, and Rothschild also received a fee from resales.

Hermès alleged that the MetaBirkins project infringed and diluted its trademarks, that the domain name “metabirkins.com” violated the federal cybersquatting law, and that Rothschild’s conduct constituted unfair competition under federal and state law. Rothschild argued that the images were an artistic project and that his use of Hermès’s marks was protected by the First Amendment.

Applicable trademark test

The court considered whether to apply the two-part test from Rogers v. Grimaldi, which protects artistic expression unless a trademark use lacks artistic relevance or explicitly misleads the public, or the more general trademark-infringement test from Gruner + Jahr. The court reaffirmed its earlier ruling that the Rogers test applies. It reasoned that admissible evidence supported Rothschild’s position that the MetaBirkins images could be artistically expressive and that the Birkin mark may have been used for expressive purposes rather than primarily as a source identifier.

The court also treated the MetaBirkins NFTs and their associated digital images together. It reasoned that consumers understood themselves to be buying exclusive ownership of the digital handbag images, not merely a digital record separate from those images.

Summary-judgment disputes

Under the artistic-relevance part of the Rogers test, the court found a genuine dispute over whether Rothschild centered the project on the Birkin bag as a genuine artistic statement or to profit from the value and goodwill of Hermès’s brand. Evidence supporting Rothschild included statements describing the project as an experiment and commentary on the Birkin’s cultural influence. Hermès presented contrary evidence, including statements about making money and exploiting publicity surrounding the collection. Because reasonable factfinders could reach different conclusions, neither side was entitled to summary judgment on this issue.

Under the explicitly-misleading part of the test, the court examined whether the project clearly misled the public into believing that Hermès created, authorized, or endorsed it. The court identified disputes concerning the strength and similarity of the marks, actual consumer confusion, Hermès’s possible entry into the NFT market, competitive proximity, Rothschild’s intent, the quality of the products, and consumer sophistication. Hermès relied in part on a study reporting an 18.7% net confusion rate and on media and social-media statements. Rothschild challenged the study and argued that the statements did not establish actual confusion. The court concluded that factual disputes concerning these factors required denial of summary judgment for both parties.

Other claims and disposition

The court stated that Hermès’s dilution and cybersquatting claims depended in part on the unresolved Rogers issue. It also found disputed facts concerning whether Rothschild had the bad-faith intent to profit required for cybersquatting liability. The court therefore held that summary judgment was inappropriate on those claims as well.

The court denied the parties’ cross-motions for summary judgment in their entirety. It did not finally decide whether the MetaBirkins infringed or diluted Hermès’s trademarks, violated the cybersquatting statute, or constituted unfair competition. The unresolved factual issues remained for further proceedings.