French fashion house Hermès has not only made headlines recently for its continued growth, but has also been in the public eye for its ongoing legal battles. The disputes surrounding the iconic Birkin bag not only delve deep into the digital realm, but also raise questions about artistic freedom and whether there is a right to luxury.
Trademark law in the metaverse
Since December 2021, the luxury group has been embroiled in a legal battle with artist Mason Rothschild, who created a virtual ‘MetaBirkin’ — an NFT inspired by the famous Hermès handbag. Over 100 unique iterations of the bag were available for sale on OpenSea, a peer-to-peer marketplace for NFTs, with a trading volume of 1.1 million dollars.
Hermès cracked down on the digital replicas, accusing the artist of infringing the luxury label’s trademark with his MetaBirkin. Following a cease-and-desist letter from the fashion house, the bags were removed from the OpenSea website. The artist responded to the allegations in an open letter posted on his Instagram profile, arguing that the NFTs were protected by the luxury brand’s trademark claims.
In January 2022, Hermès filed a lawsuit against Rothschild in the New York Southern District Court for trademark infringement. “Hermès has not authorised nor consented to Mason Rothschild’s commercialisation or creation of our Birkin bag in the metaverse,” the company told the Financial Times in early December 2021.
In the lawsuit, the luxury company demanded that the artist stop his activities, hand over the MetaBirkin domain name and pay damages. The company also accused Rothschild of trying “to make a quick buck by trading on the ‘real world’ goodwill of Hermès by creating and selling ‘virtual’ goods.” The artist allegedly chose to sell a digital MetaBirkin because of the physical bag’s value.
Hermès won the case in February 2023, when a nine-person jury awarded the French bag maker 133,000 dollars in damages. The US federal court ruled that the artist’s sale of the NFTs constituted trademark infringement — even in the unregulated metaverse.
“The MetaBirkin controversy has sparked a discussion about trademark law and freedom of artistic expression. With many fashion powerhouses, including Nike, Adidas, Givenchy and Karl Lagerfeld, entering the metaverse, the question of how trademark law designed for physical products applies to digital products and NFTs is increasingly relevant. As the metaverse becomes increasingly commercialised, the need for clear rules and legal certainties becomes more apparent.”
Read more: Law & Practice: How protected is a brand in the metaverse?
The luxury brand’s legal team argued that Rothschild was seeking to make a quick profit by appropriating the MetaBirkins trademark, trading on Hermès’ ‘real world’ goodwill for ‘virtual’ goods.
Trial redux?
In March 2023, the legal battle entered round two, when Rothschild moved to dismiss the case in court. The artist also responded to Hermès’ earlier motion for a permanent injunction, which would have required the luxury company to hand over all materials, including the MetaBirkin’s website domain and social media accounts. The second motion for summary judgement could lead to a new trial.
The legal dispute between the two parties was the first trial to address the legal and creative boundaries of digital goods. The MetaBirkin NFTs were subject to trademark law, the jury found, because they could be directly associated with the physical Birkin. However, the proceedings highlighted the need to sharpen the boundaries between the digitalisation of assets and the rights of luxury goods consumers.
Trademark disputes in the real world
The Hermès Birkin bag has not only caused a stir in the metaverse, however, but has also reignited the topic of trademark infringement in the physical world.
Berlin-based fashion label Namilia sent a reworked Birkin down the runway at Berlin Fashion Week in July 2023. The brand created a corset out of the luxury handbag for its SS24 collection ‘In Loving Memory of My Sugar Daddy’ and subsequently faced a trademark lawsuit from Hermès.
The case was heard before the Frankfurt Regional Court, which rejected the luxury label’s request for a preliminary injunction. Hermès could not assert its European trademark rights in this case, the court ruled. In its statement, the regional court invoked the right to artistic freedom. A decisive factor was that Hermès’ brand was not disparaged or degraded by Namilia’s fashion show.
“The decisions of the Frankfurt Regional Court show that artistic and freedom of expression, as enshrined in the German constitution, can be of great importance. Sometimes, artistic and freedom of expression can also override the protection of trademark rights.
The legally binding decisions are thus issued in a legal field of tension that has not yet been conclusively explored: On the one hand, there are the (legitimate) interests of brand owners in protecting their brands, which have been built up and made known through massive investments, as best as possible. On the other hand, there are the fundamental rights of artistic and freedom of expression. After all, fashion can be a way to express art, one’s own opinion, protest or similar.
The decisions show: As far as the protection of well-known brands may normally go — sometimes there are higher-ranking concerns to which trademark law must be subordinate.”
Janina Wortmann, lawyer and associate partner in the Munich office of the law firm Noerr for FashionUnited.
Source: Dispute over Hermès bags at fashion show: Artistic freedom trumps trademark law
Dispute continues in 2024
The Birkin-related disputes continue this year in yet another dimension: Hermès is now facing a lawsuit in California by potential customers.
In a class action lawsuit, they accuse the fashion house of denying them access to the exclusive handbag unless they first spend large sums of money on the brand’s other luxury products.
The Birkin bags are not displayed in stores and cannot be ordered online, so customers have to ‘earn’ the chance to buy one. This practice violates antitrust law, the plaintiffs argue, because it artificially inflates the effective cost of the product.
This article originally appeared on FashionUnited.DE. Translation and edit by: Rachel Douglass.
