Are Trademark Rights of NFTs in the Bag?


As Pete Davidson said in his famous rap on Saturday Night Live, “what the [heck is] an NFT?”  NFTs, or non-fungible tokens, are uniquely identifiable digital assets that are tracked on a blockchain so that ownership can be recorded as they are sold or traded.  Some NFTs are digital versions of clothes or fashion accessories that can be worn by avatars in the Metaverse, an online community similar to a video game.

Hermès is a luxury design house famous for their Birkin handbag, costing up to $2 million.  Mason Rothschild is an artist that created and sold 100 MetaBirkins, which are NFTs linked to images of faux-fur-covered Birkin bags.  Rothschild said that these images are "a tribute to Herm[é]s' most famous handbag,” and that he "wanted to see as an experiment if [he] could create that same kind of illusion that [the Birkin bag] has in real life as a digital commodity."  These NFTs are valued over $1 million.

Newspapers and magazines—such as Elle, L'Officiel, and The New York Post­—have mistakenly reported Rothchild’s MetaBirkin collection as officially affiliated with Hermès.  Accordingly, Hermès is suing Rothschild for trademark infringement of its Birkin trademark, among other claims. 

Rothschild argued that the freedom of speech protection under the First Amendment gave him “the right to make and sell art that depicts Birkin bags, just as it gave Andy Warhol the right to make and sell art depicting Campbell’s soup cans.”

Recently, a New York court agreed that the MetaBirkin—an NFT of an image—is an artistic work protected under the First Amendment.  However, the court stated that NFTs linked to a digital file of a Birkin bag to be worn by avatars in the metaverse likely would not receive the same First Amendment protections because such a bag may be a commodity rather than an artistic work. 

Intellectual property law surrounding NFTs is a gray area, leaving trademark owners uncertain as to how to enforce their rights in this digital space.  This ongoing litigation will hopefully shed some light on where intellectual property rights lie for NFTs of trademarked products.