MetaBirkins: No more 'First Amendment smokescreen’ ?
As yesterday’s landmark win for luxury house Hermès against MetaBirkin creator Mason Rothschild is hailed as a victory for brands in general, trademark lawyers have been relishing the demise of the so-called ‘First Amendment smokescreen’.
The memorable term, alluded to by Julia Anne Matheson, partner at Potomac Law, refers to a practice held in low regard by many IP owners.
It’s an excuse that has, for too long, been used by some companies seeking to use the freedom of expression enshrined in the amendment as a cover for potentially infringing activities, say lawyers.
As Matheson points out: “The [MetaBirkin] judgment means that citing the amendment no longer offers a free ride for trademark infringement, and that all trademark owners can exhale with some degree of relief.”
The verdict also confirmed that the value of brands’ products extends to the metaverse, putting an end to speculation over the extent to which IP can protect virtual goods.
The Warhol defence
Rothschild’s defence for creating digital depictions of the Hermès bag was that he merely exercised his First Amendment rights—just as Andy Warhol successfully did when he created his Campbell’s soup can images in the early 1960s.
He also was allowed by Judge Jed Rakoff to apply the Second Circuit’s test in Rogers v Grimaldi (1989).
Under this precedent, use of a trademark in the title of an artistic expression is trademark infringement only if the title has no artistic relevance to the underlying work or explicitly misleads consumers as to the source or content of the work.
If the plaintiff passes this test, the underlying work itself is deemed to be largely protected under the First Amendment as expressive art.
But as Finnegan partner Mark Sommers, argues, Rothschild's narrative “simply unravelled” in the face of evidence that Rothschild “deliberately sought to profit from the goodwill Hermes had developed in its Birkin trademarks”.
A familiar refrain
Rothschild’s story was a “familiar refrain, with impulsive appeal” explains Sommers.
“He sought artistic safe-haven—drawing parallels between himself and Andy Warhol—and casting himself as an artist who simply created transformative art stemming from Hermes trademark rights in its Birkin bags.”
But ultimately, the Manhattan jury opted for the arguments concerning trademark infringement and consumer protection rather than being swayed by those citing freedom of expression.
According to Deborah Greaves, partner at Withers, Rothschild did not help his cause by the manner in which he promoted his creations.
“The artist relied on a fair use defence, arguing that his depiction of the Birkin bags covered in fur was a commentary on luxury fashion, but it is not clear whether this commentary was clearly communicated,” says Greaves, diplomatically.
She observes that if the artist’s purpose was commentary, he “could have—and should have—named or marketed his collection in a manner that expressed the message”.
NFT opportunities for brand owners
In its verdict, the jury emphasised that NFTs should be viewed as consumer products subject to established IP laws that safeguard brands from infringement, rather than as independent artistic works.
For Rob LeBlanc, a partner at Haynes Boone, the key takeaway from the judgement bodes well for established trademark owners and any future bids to set up their own line of NFTs.
“Hermès wasn't yet in the metaverse space, but still prevailed. This should come as a relief to brand owners in that you can still find protection in the metaverse based on real-world IP rights,” he explains.
There will now, he added, be real consequences for NFT creators found to have infringed rights.
“One would assume that NFT creators will be much more cautious about using trademarks and trade dress of well-known products without authorisation in the future.”
New tech, same rules
Reassuringly for brands and trademark practitioners, the verdict also reinforces the strength of existing IP law, amid speculation that emerging technologies could potentially demand new legislation.
As Greaves observes, it serves as a salutary reminder to artists and creators that NFTs that appropriate the trademarks or copyrights of others are subject to the same IP protection as other works.
“The issue resolved in the MetaBirkin case really turns on whether the artist was infringing the Birkin trademark in order to promote and monetise his MetaBirkin NFTs. The underlying IP issues are often the same, even if the mode of distribution is via NFT,” she reflects.
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