Amid MetaBirkins Trial, Court Reaffirms Summary Judgment Order

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Amid the trial that is underway before a jury within the U.S. District Court for the Southern District of New York, during which Hermès is accusing Mason Rothschild of infringing and diluting its famed Birkin trademark and commerce costume by method of a group of “MetaBirkins” NFTs tied to imagery that depicts fur-covered Birkin bags, the court has reaffirmed an earlier order refusing to grant both Hermès or Rothschild’s motions for summary judgment. Following from a brief order last month, Judge Jed Rakoff has set out the reasoning for his denials, and shed gentle on an array of interesting elements from the parties’ discovery, together with Rothschild’s alleged plans to make additional meta-titled NFTs, including, “MetaPateks.”

In furtherance of their motions for abstract judgment, Judge Rakoff states that Hermès and Rothschild asked the court to discover out two questions: (1) Whether the digital pictures underlying the MetaBirkins NFTs ought to be evaluated underneath the Rogers v. Grimaldi test for inventive works or the Gruner + Jahr test for general trademark infringement; and (2) whether, under whichever take a look at is applied, the MetaBirkins NFT images or related products infringe and/or dilute Hermès’ logos pertaining to its Birkin handbag.

As to the primary, “threshold question,” the courtroom reaffirms the determination it made in its May 2022 order, in which it acknowledged that the plaintiffs’ claims should be assessed underneath the Rogers test, noting that “courts on this circuit and elsewhere have lengthy applied a two- tiered approach to trademark infringement claims” when the alleged infringement includes works of “artistic expression.” Judge Rakoff says that the gist of fellow district courts’ holdings is that “as lengthy because the plaintiff’s trademark is used to further plausibly expressive purposes, and to not mislead customers concerning the origin of a product or counsel that the plaintiff endorsed or is affiliated with it, the First Amendment protects that use.” 

Hermès has argued that that as a outcome of “Rothschild had no discernable artistic intent or expression in selling and selling [the MetaBirkins NFTs],” the Gruner take a look at should apply. In arguing its position, Hermès points to proof of precise confusion, in addition to proof “from which an affordable juror may conclude that Rothschild’s claims that he considered MetaBirkins as a largely artistic endeavor is a fabrication.”

For instance, Hermès relies on evidence in which Rothschild – in discussions with traders – “observed that ‘he doesn’t suppose folks notice how a lot you can get away with in art by saying ‘in the fashion of’ and boasted that he was ‘in the rare position to bully a multi-billion-dollar corp[oration].’” Additionally, Hermès put forth a text message in which “Rothschild told associates that he wanted to make ‘big money’ by ‘capital[izing] on the hype’ within the media generated for the [MetaBirkins] collection.” Hermès argues that these comments “are probative of an intent to exploit [the reputation of the Hermès Birkin marks],” and that Rothschild “invoked the First Amendment as a defense only after it had sent [him] a cease-and-desist letter.”

Unpersuaded, Judge Rakoff contends that “such proof does little greater than show that Rothschild’s project was driven in part by pecuniary motives, a fact that doesn’t bar software of the Rogers test.” 

Rothschild, on the other hand, has persistently asserted that “the project’s expressive purpose was clear from its inception.” Specifically, the MetaBirkins NFTs are “‘part of [an] inventive experiment to see how individuals with money and affect who drive the culture would respond to’ the MetaBirkins and ‘whether they actually would ascribe worth to the ephemeral MetaBirkins” in the same method they attached worth to the bodily Birkin luggage.” 

Ultimately, the courtroom states – and the currently-pending trial facilities on the actual fact – that there’s “a genuine factual dispute as as to if Rothschild’s choice to center his work across the Birkin bag stemmed from genuine artistic expression or, somewhat, from an illegal intent to money in on a highly unique and uniquely useful model identify.” Because “reasonable people may reach different conclusions on the ‘artistic relevance” factor,’” the courtroom denied both parties’ summary judgment motions on that entrance. 

Turning to the problem of whether Rothschild’s MetaBirkins are “explicitly deceptive,” the court docket states that the events “disagree vehemently over whether customers have been confused about Hermès’ association with the MetaBirkins project,” which is just one of many Polaroid elements. Because there stay “substantial factual disagreements between the parties with respect to many – if not most – of the eight elements, any of which might be dispositive to the outcome,” the court equally declined to grant abstract judgment for both party on this issue. 

An extra level value noting: Judge Rakoff delves into what the works at issue are “from the angle of the potential client,” stating that “individuals do not purchase NFTs to personal a ‘digital deed’ divorced from another asset: they buy them precisely so that they’ll exclusively personal the content material related to the NFT.” More than that, he states that “undisputed proof in the document indicates that consumers did in reality understand themselves to be purchasing exclusive possession of the digital picture alongside the NFT.”

Some Discovery Takeaways

By way of some background, the court’s order shed mild on some attention-grabbing elements that were uncovered during discovery within the case … 

– Rothschild thought of creating greater than the primary 100 MetaBirkins NFTs. According to the order, “Rothschild contemplated ‘minting’ more MetaBirkins NFTs to promote.” In conversations along with his associate, Mark Berden, Rothschild remarked that they “should contemplate producing upward to 9 hundred, including that the income of these newly minted NFTs should be divided between the two, with $400,000 going to Rothschild and $100,000 to Berden.” 

– “Rothschild additionally discussed [with his associates] potential future digital projects centered on luxury products, corresponding to watch NFTs referred to as ‘MetaPateks’ that may be modeled after the famous watches produced by Patek Philippe.” 

– Hermès asserts that Rothschild’s venture has “disrupted [its] efforts to enter the NFT market and hindered its capacity to profit in that area from the Birkin bag’s well-known popularity … Indeed, the corporate alleges that it has for years developed potential makes use of for NFTs as part of its general enterprise technique. Rothschild’s efforts to crowd it out of the NFT market, Hermès claims, locations it at a competitive drawback: its plans to enter this market observe on the efforts of a number of high trend manufacturers to develop NFT methods that may enable them to market their goods to a wider audience.”

– There is substantial disagreement between the parties as as to whether Rothschild himself created the digital pictures related to the MetaBirkins venture or whether another artist – Mark Berden – was answerable for designing and rendering them. (The courtroom has acknowledged that this dispute is “legally irrelevant as far as the moment motions are concerned. Whether there is admissible evidence that the MetaBirkins are art – and due to this fact, whether or not the Rogers check should apply – doesn’t turn on who designed the NFTs.”)

The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).

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