February 21, 2023

The “Metabirkin” Decision: That Ain’t Art

Following up on an earlier blog post, on February 2, 2023, the Court in Hermès’ trademark suit against the artist known as Mason Rothschild issued a decision explaining his denial of both parties’ motions for summary judgment. If you want a refresher about this case, you can find the earlier blog post here.  

On February 8, 2023, after an eight-day trial, a federal jury found in favor of Hermès and awarded the fashion company $133,000 in damages. Fundamentally, the jury decided the digital images were not art, not protected by the First Amendment and, as such, subject to trademark laws. This is an important case as it is the first trial to look at trademark infringement and NFTs. 

Let’s dig into both decisions. 

     The Judge’s Order 

There are a couple of interesting elements in the judge’s decision. 

Hermès argued that Rothschild’s work was devoid of any artistic value because he could at any time replace the digital images of fake fur bags with other images. According to Hermès, this meant the term “MetaBirkins” referred to the NFTs and not the digital images themselves. Judge Jed Rakoff rejected this’ argument, finding that potential consumers believed they were purchasing ownership of the digital image, not just the NFT. Therefore, he concluded that the term “Metabirkin” “should be understood to refer to both the NFT and the digital image with which it is associated.”

Judge Rakoff also (again) concluded that this case was governed by Rogers v. Grimaldi because Metabirkins originated, at least in part, “as a form of artistic expression,” and the fact that Rothschild may have also had commercial motives didn’t remove First Amendment protections.

In rejecting the parties’ motions for summary judgment, the judge held that a jury needed to decide whether Rothschild viewed the Metabirkins project as primarily one of artistic expression or whether, as Hermès, argued, his motives were purely pecuniary and he fabricated the claim of artistic expression in order to seek refuge in the First Amendment.

The judge also noted that the Second Circuit Court of Appeals hadn’t provided a lot of guidance as to what “artistically relevant,” as used in Rogers, means. Despite this, the judge concluded that the central inquiry in determining whether something is “artistic” is whether “the trademark was used to mislead the public about the origin of the product or the parties that endorse or are affiliated with it.” And that, he determined, required a jury to consider the so-called Polaroid factors. He also noted that the likelihood of confusion under these factors must be particularly compelling in order to abrogate First Amendment protection. 

     The Jury’s Decision

It’s impossible to know exactly why the jury reached its verdict, but looking at the Court’s Instructions of Law to the Jury and the jury’s verdict sheet, an educated guess (at least on the trademark claim) is that the jury concluded there was a likelihood consumers would believe that Rothschild’s MetaBirkins were sponsored or otherwise connected with or approved by Hermès and that Hermès had proved that Rothschild intended to confuse potential consumers.

Interestingly, in instructing the jury on the applicability of Rothschild’s First Amendment defense, the court seemed to assume that Rothschild’s use of the term “Metabirkin” was artistically relevant. 

A few other things here: (1) the judge did not instruct the jury that it should look to the Polaroid factors to determine if something was explicitly misleading; (2) the jury instructions dropped any reference to the Polaroid factors from the discussion of whether the MetaBirkin NFTs were explicitly misleading; and (3) the judge seems to have substituted the “explicitly misleading” language from Rogers with an instruction that the jury needed to determine whether “Hermès had prove[n] that Mr. Rothschild actually intended to confuse potential customers” and, if it had, that he had waived his First Amendment protection.

In its verdict, the jury found Rothschild liable for trademark infringement, trademark dilution and “cybersquatting” (using a brand name in bad faith with the intent of making a profit from a trademark belonging to someone else). 

We’ll see if Rothschild appeals (he and his lawyers have stated they will) and, if so, whether he raises those issues on appeal.