Hermes Vs Metabirkins is now considered a landmark case.

The first-ever trial examining NFT, intellectual property nexus legal case has ruled in favour of Hermes. 

The Hermes International SA v. Rothschild case was kickstarted by artist Mason Rothschild’s 100 Metabirkins Nfts. For those who need clarification on what the 8-day court case in New York was all about, here is the breakdown.

The Metabirkins that where on trial, are a type of non-fungible token (NFT) inspired by the iconic Birkin handbag created by the French luxury goods brand, Hermès. Rothchild’s Metabirkins were a digital representations of the luxury bags and stored on the blockchain, to be bought, sold, and traded like other NFTs.

The popularity of metabirkins reflected the growing interest in NFTs and the growing trend of using blockchain technology to authenticate and track the ownership of luxury goods. The Metabirkins offered a new way for people to invest in and trade luxury goods and offered a way for fans of the Birkin handbag to collect and showcase their virtual versions of the bags. 

So what was the problem?

Well, the creation and sale of Metabirkins raised legal issues related to intellectual property rights and trademark infringement. The Metabirkins brought about the question of permission. Should Rothschild have gotten authorisation first to depict or reference the Birkin handbag or the Hermès brand? 

The jury trial in the Southern District of NY ruled that Rothschild had infringed on the trademark protections of Hermès. Although the artist plans to appeal the jury’s decision, the case has become a warning to Fashion Brands and other IP owners that to avoid the Hermes Vs Metabirkins situation; they need to take steps to protect their rights in the metaverse.

So with the growing population of NFTs how can we move forward? Well I believe that we need to understand how NFTS can infringe on Fashion brands, have a good grasp of what the legal implications can be, explore how you as a fashion brands can protect your IP in the metaverse and what laws currently exist pertaining to digital fashion goods.

How NFTs can Infringe on Fashion Brands

NFTs exploded into the fashion industry in 2021, although some argue that  NFTs actually went mainstream in 2017. The problem now is that technology is moving faster than the law resulting in a lot of chatter about how important it is to start viewing NFTS through the lens of intellectual property law.

If one were to take a zoomed-out approach, non-fungible tokens (NFTs) do not necessarily infringe on fashion brands. However, using NFTs in the fashion industry can raise concerns around intellectual property rights and trademark infringement, mainly if the NFTs depict or reference well-known fashion brands or logos without permission- like the Metabirkins. 

Yes, we have witnessed fashion brands embracing NFTs and using them as a new way to sell and authenticate their products, but when it comes to creators or sellers of the NFTs offering NFTs for sale without the proper permissions and licenses in place, is when legal problems can begin. 

So what are the legal implications?

Creators need to be aware that if an NFTs depicts or references well-known fashion brands or logos without permission, the creators or sellers of the NFTs may infringe on the fashion brands’ copyright. Also, the creators or sellers of the NFTs should be aware that they cannot use the trademarks of well-known fashion brands without permission because it may infringe on the trademark rights of the fashion brands. 

It is also essential to be aware that should you use a person’s image or likeness in an NFT without their permission, you could be violating their right to publicity, mainly if the NFT is used to sell products or endorse a brand.

When it comes to contracts and licensing agreements, creators need to be aware that when it comes to NFTs, they may be in breach of the accords if they use the images or logos of the fashion brands in their NFTs without permission.

When it comes to whether NFTs infringe on fashion brands, it depends on the specific circumstances surrounding each case, including the content of the NFTs, how they were created, and the rights held by the parties involved.

Lastly, NFTs are a new and rapidly evolving area of law, and the laws governing NFTs may vary depending on the jurisdiction. Therefore the use of NFTs in the fashion industry can raise complex legal issues, and it’s important for creators and sellers of NFTs; as a result, enforcing rights and resolving disputes related to NFTs can be challenging.

Understanding the Laws that Govern Digital Fashion Goods

As brands ranging from Balenciaga to Nike Inc. announce plans to expand into NFTs and the metaverse, it was only a matter of time before the conversation of protecting one’s IP in the metaverse was going to happen. 

Yes the space is relatively new, but brands are being urged to take a proactive approach. One way of doing this is to work closely with legal counsel/experts who are closely following the influence of pending and future NFT cases to develop a comprehensive plan that meets their needs and protects their rights in this rapidly evolving environment. Another way you can protect your IP in the metaverse is by taking heed of the following steps:

1. Trademark registration: Fashion brands should consider registering their trademarks with the appropriate authorities to establish their rights in the metaverse. This can help prevent others from using similar trademarks that could confuse the brand’s products.
2. Copyright protection: Fashion brands should ensure they have the necessary rights to any images, logos, or other content used in the metaverse and should take steps to protect these rights through copyright registration or other means.
3. Licensing agreements: Fashion brands can enter into agreements with metaverse platforms, creators, and other parties to control the use of their IP in the metaverse. These agreements can specify the terms and conditions under which the IP can be used and can help ensure that the brand’s rights are protected.
4. Monitoring and enforcement: Fashion brands should monitor the metaverse for any unauthorised use of their IP and take steps to enforce their rights if necessary. This may involve sending cease and desist letters, filing lawsuits, or seeking other remedies.
5. Working with metaverse communities: Fashion brands should engage with metaverse communities and build relationships with users, creators, and other parties in the metaverse. This helps build brand awareness and makes it easier to detect and address any unauthorised use of the brand’s IP.

To conclude, although the laws that govern digital fashion are complex and constantly evolving, creators and sellers of these goods must be mindful of the rules and obtain the necessary permissions and licenses before selling the goods. 

If the Hermes International SA v. Rothschild, case teaches you one thing, let it be this; if you are a brand, take responsibility and educate yourself about how to protect your IP in the metaverse. To the creators and sellers be familiar with the laws governing digital fashion goods by understanding critical legal issues, being mindful of problems, and obtaining the necessary permissions and licenses before offering NFTs for sale.

First published on Shape Innovate.