This is an informal case summary prepared for the purposes of facilitating exchange during the 2023 WIPO IP Judges Forum.
Session 5: Generative Artificial Intelligence, the Metaverse and Intellectual Property Infringement
United States District Court of the Southern District of New York [2023]: Hermes Int'l v. Rothschild, No. 22-CV-384-JSR, 2023 WL 1458126 (S.D.N.Y. Feb. 2, 2023).
Date of judgment: February 2, 2023
Issuing authority: U.S. District Court for the Southern District of New York
Level of the issuing authority: First Instance (Trial Court)
Type of procedure: Judicial (Civin( �/span>
Subject matter: Trademarks; Enforcement of IP and Related Laws
Plaintiff: Hermès Int’l
Defendant: Mason Rothschild
Keywords: First Amendment, Trademark infringement, Non-fungible tokens (NFTs), Blockchain, Intellectual property
Basic facts: Hermès, the luxury fashion brand, designs and produces the Birkin handbag. Mason Rothschild created a collection of digital “MetaBirkin” bags depicting the Birkin handbags and used NFTs (digital records of ownership) to sell the digital images to individual buyers. Hermès sued Rothschild for, among other claims, trademark infringement. Of note, one of Rothschild’s primary defenses was that he is entitled to protection under free speech principles of the U.S. First Amendment.
Held: A judge in the U.S. District Court for the Southern District of New York denied summary judgment due to factual disputes and held that Rothschild’s MetaBirkins “could constitute a form of artistic expression”, so the more protective legal test for U.S. First Amendment free speech protection applied to evaluate whether digital images of fur-covered Birkin handbags underlying the NFTs infringed Hermès’ trademark.
Note: There are trial courts that have held the opposite, depending on the facts. In Yuga Labs, Inc. v. Ripps, No. CV 22-4355-JFW(JEMX), 2023 WL 3316748 (C.D. Cal. Apr. 21, 2023), a federal trial court in California denied summary judgment in part and held that that the U.S. First Amendment free speech protection defense does not apply, because Ripps’s creation of NFTs pointing to the same images at Yuga’s NFTs is not expressive artistic work as required.
Relevant holdings in relation to generative artificial intelligence, the Metaverse and intellectual property infringement: The U.S. District Court for the Southern District of New York concluded that the so-called Rogers test (established by the case of Rogers v Grimaldi) applies to Hermès’ claims because, on the pleadings, Rothschild’s MetaBirkins “could constitute a form of artistic expression.” The Rogers test affords heightened protection to alleged trademark infringements when a title with at least some artistic relevance is not explicitly misleading as to source or content.
In holding that the Rogers test governs the case, the District Court found that Rothschild had identified admissible evidence supporting his assertion that his use of Hermès’ mark functioned primarily as part of an artistically expressive project, not as a source identifier that would mislead consumers into thinking that Hermès originated or otherwise endorsed the MetaBirkins collection.
Relevant legislation:
Trademark Act of 1946 (Lanham Act), 15 U.S.C. § 1125(a) (trademark infringement requirements)