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How The Hermès Lawsuit Could Determine the Future of Trademark Rights in NFTs

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On January 14, French fashion house Hermès International sued artist Mason Rothschild for trademark infringement following the release of MetaBirkins — a collection of 100 NFT Birkin bags covered in faux fur in a range of colors and designs.

Actual Hermès Birkin bags are notoriously expensive and difficult to get, making them a top choice for society’s elite. In order to purchase one of these coveted bags, you have to develop a relationship with a sales representative, establish a purchasing history, and demonstrate your appreciation and knowledge of the brand over time. Considering this laundry list of requirements, it’s no surprise that the luxury brand focused on exclusivity does everything is can to weed out replicas — even NFT versions.

Filed in the Southern District of New York, this case brings new issues to the legal landscape that force the intersection of intellectual property law, constitutional law, technology, and fashion.

Balancing “artistic expression” with real-world art

In its 47-page complaint, Hermès argues that Rothschild’s MetaBirkins NFTs infringe upon the luxury brand’s Birkin mark, which dates back to 1984. Due to the immense strength its Birkin mark has, Hermès believes that Rothschild’s NFT collection is “likely to cause consumer confusion and mistake in the minds of the public,” as outlined under the Lanham Act — the federal statute that governs trademarks, service marks, and unfair competition.

Further, Hermès asserts that Rothschild not only didn’t have permission to use its Birkin mark, but has also visibly profited from the unauthorized use of the trademark through the sale and resale of the NFTs.

At the heart of Rothschild’s argument is the idea that he should be allowed to “create art based on [his] interpretations of the world around [him].” Rothschild has asserted a “fair use” defense under the First Amendment, specifically referencing Andy Warhol’s Campbell Soup Cans series as justification for why he should be able to continue marketing and promoting his MetaBirkins NFT collection.

While Warhol’s art appeared identical to the well-known Campbell soup grocery items, the artist’s personal touch and expression were visible through slight variations in lettering and symbols.Rothschild argues that what he’s done with MetaBirkins is no different than Warhol’s 32-work campaign — he is merely selling the “expression” of the Birkin, rather than trying to pass the artwork off off as affiliated with the real thing.

Andy Warhol Campbell's Soup, 1968
Andy Warhol Campbell’s Soup, 1968

Speaking to Rothschild’s arguments Hermès says that Rothschild is simply “seeking to make his fortune by swapping out Hermès’ ‘real life’ protections for “virtual rights,” choosing to capitalize on an already successful brand in order to generate profits for himself.

Getting to know the landmark ‘Rogers’ test (1989)

Crucial to understanding this case and others that will inevitably follow, is the Second Circuit’s 1989 case of Rogers v. Grimaldi, which set forth the test of when an artistic work is alleged to have infringed a Lanham Act-protected right. Ultimately, the Rogers test acts to protect any possible First Amendment interests and is still used as the leading standard for trademark infringement today.

Under Rogers, the use of a trademark in an artistic work is actionable only if the mark:

  1. Has no “artistic relevance” to the underlying work; or
  1. Explicitly misleads as to the source or content of the work

Speaking to the second element of “explicitly misleading,” the Ninth Circuit has held that “the use of a mark alone may explicitly mislead consumers about a product’s source if consumers would ordinarily identify the source by the mark itself.”

This was further explained in Gordon v. Drape Creative, Inc., whereby the jury found that the defendant “simply used Gordon’s mark with minimal artistic expression of their own, and used it in the same way that Gordon was using it.”

Rothschilds’ motion to dismiss the case is denied

On May 6, U.S. District Judge Jed Rakoff rejected a Motion to Dismiss filed in March by Rothschild, allowing for Hermès’ lawsuit to move forward.

In addition to First Amendment interests, another crucial element to Rothschild’s argument in the 33-page Motion, is the “artistic expression” element of Rogers, explaining that MetaBirkins NFTs are artworks that provide commentary “on the animal cruelty inherent in Hermès’ manufacture of its ultra-expensive leather handbags.” Specifically, he says that the MetaBirkins NFTs “are not handbags” and “carry nothing but meaning.” For this reason, Rothschild says his NFT collection is protected under the First Amendment and would fail under the Rogers test.

As an artist, Rothschild says that artists are “generally free to choose the topics they address” and to “depict objects that exist in the world as they see them.” The MetaBirkins NFTs, according to Rothschild, depict “furry Birkin bags, reflecting his comment on the fashion industry’s animal cruelty and the movement to find leather alternatives.”

In the Motion, Rothschild references two examples, beginning with the Second Circuit’s “Ginger and Fred” analysis, in addition to explaining why Andy Warhol’s Campbell’s Soup Cans are synonymous with what he’s doing with his NFT collection — as MetaBirkins are “not commercializable assets.”

Next, Rothschild argued that his use is “not explicitly misleading” as also required under Rogers. Specifically, the Defendant argues that explicit misleadingness cannot be established by the use of the Birkin mark alone, as it would, according to the Brown court, render Rogers a nullity. 

While some people might take the MetaBirkins name to implicitly suggest that Hermes had “endorsed the work or had a role in producing it,” the Lanham Act cannot be applied when there is a “mixture of meanings.” In other words, the “explicit misleadingness” element is not the same as “general confusion.”

Rothschild’s third argument revolves around the use of NFTs as a form of authentication, which does not preclude First Amendment protections. In the Motion, Rothschild emphasizes his use of NFTs as a “new technological mechanism” to authenticate his arm, which does not detract from his First Amendment protections. He says that “NFTs are simply a code that points to a digital asset” and nothing more. 

Throughout the Motion, he references a number of cases where courts in the Second Circuit, among others, not only applied Rogers but only applied it in instances where the defendant was “selling the work” — rather than the creative expression. It has been established that speech that is not “purely commercial” — or if it does something more than propose a commercial transaction, it is entitled to full First Amendment protection.

Setting the stage for how IP law is applied to NFTs

While other cases such as Nike/StockX and Miramax/Quentin Tarantino are also in active litigation, Hermès’ lawsuit against Rothschild will certainly set the stage for how intellectual property is applied to the world of digital assets and NFTs. As more luxury brands enter into the metaverse and launch their respective NFT projects, courts will be required to weigh in on the confines and parameters of what it means to introduce originality while balancing artistic expression and the right to create. 

While Hermès currently doesn’t operate in the metaverse (although the brand is curious), it will be interesting to see how the outcome of this case shapes the overall brand’s perspective on how the world is evolving and changing around it.

For more information on Hermès’ lawsuit, you can track the case at Hermes International v. Rothschild, U.S. District Court for the Southern District of New York, No. 1:22-cv-00384

Andrew Rossow is an attorney and journalist who focuses on fintech and intellectual property law.





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Celebrating Diversity in Web3 at Zoratopia

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The second-annual Zoratopia event — presented by community-led platform, Zora — was held this week during NFT.NYC. The goal of the event was to showcase the diversity present in the NFT space by featuring an array of creators who have innovated in all sectors of the NFT and Zora ecosystems.

Spanning three days of programming, Zoratopia was spearheaded by a mish-mash of influential creators, including Zora’s own head of community programming, Latashá. Kicking off with yoga and brunch on June 21 at Gaia Nomaya in Brooklyn, the first day of activities drew to a close with music and art. Headlining the slew of art performances for the day’s guests were BXB Love, Blaire WYMN, and Jem Gold.

The following day saw panels featuring industry leaders. These segments, dubbed The New Internet Panel, touched on topics such as building tools for emerging mindsets, and how diversity will play a crucial role in building the future of Web3. Each of Zoratopia’s events brought out a diverse — and at times, a predominantly non-white — audience that spoke to Zora’s mission of inclusiveness, curating events that accurately represent the NFT space as a whole. The second day also saw a photoshoot for members of Zora’s NFT fam in attendance.

On the third and final day of the event, Zora hosted what was surely one of the most sizable undertakings of all the NFT.NYC satellite events. Beginning with an NFT exhibit promising attendees exclusive (and free) access to merchandise, the day’s events segued into a raucous afterparty starting at 6 p.m. EDT: the Zoratopia Ravey Bashment. Throughout the night, influential acts like TOKiMONSTA, Iman Europe, Mick Jenkins, and Latashá herself graced the venue’s two stages.

These performances were accompanied by NFT displays, immersive art installations, and free food and drink keeping attendees flowing through the Knockdown Center in Queens, New York.



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RadioShack Is Back From the Dead As a Web3 Brand

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Just when we thought the 2022 crypto timeline couldn’t get any crazier, deceased American tech retailer RadioShack has been resurrected on Twitter as a snarky Web3 brand. Instead of a one-stop-shop for batteries, computer cables, and remote-control toys, theonce-beloved electronics dealer has been reinvigorated as a cryptocurrency swap

RadioShack has actually existed as a Web3 company for a couple of years now (don’t fret, this isn’t some sort of Mandela effect) thanks to the handiwork of entrepreneur investors Alex Mehr and Tai Lopez.

It all dates back to November 2020 when the aforementioned Mehr and Lopez made headlines after they bought RadioShack out of bankruptcy. While the deal definitely raised some eyebrows at the time, the company’s recent social media campaigns have been drawing quite a bit of attention in the NFT and crypto space.

Reportedly spearheaded by influential NFT collector fxnction, the RadioShack Twitter as of late has been on a tirade, roasting NFT traders, calling out other discontinued brands, and engaging in witty (and sometimes vulgar) back and forths with members of the NFT community. Yet it seems the stunt was mostly a bid for the attention of the greater NFT ecosystem as RadioShack looks to compete with other crypto swaps and exchanges during a bear market.

Stunt or not, once the news was out that fxnction was behind RadioShack’s snarkiness, many other prominent NFT personalities joined in on the joke, engaging in some (probably much-needed) blockchain comedy relief. Although it remains to be seen if RadioShack will keep up its streak as a hot topic, the simple fact that a retro brand has transformed into a fully-fledged Web3 entity is truly incredible.





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How to Determine What NFTs to Buy: A Must-Read Guide

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One of the most challenging aspects of buying and selling NFTs is finding the right one to purchase. Choosing the perfect NFT for your collection can be as simple as browsing a marketplace in search of art you enjoy (much like browsing through items on Amazon). This is where many people get their start in the NFT world. 

But NFTs offer a lot more than just art. Smart contracts in NFTs (bits of computer code that allow them to be minted and traded without third parties) let owners access unique assets contained within the NFT, manage their transferability, and more. There’s also a massive social aspect to buying an NFT. When you become an NFT owner, you become a part of a project’s community, led by a team that (often) has plans to expand the project for months and years to come. 

There are plenty of good reasons to buy NFTs, and each person in the community has their own motivation for doing so. To be clear this is not financial advice — never spend more than you’re willing to lose. But if you’re ready to find the NFT that’s right for you, this guide covers everything you need to know. To make things easy to digest, we’ve broken things down based on the primary reasons people generally have for buying NFTs: To empower artists, for collectibility, to use as an investment, and to join a community.

If you want to buy an NFT to support an artist

One of the best things about the advent of NFTs is that they enable artists to directly profit from their work, removing the need to go through intermediaries like large, cumbersome cultural institutions. This empowerment is one of the main things we celebrate here at nft now. It has opened up a new creative economy for all kinds of artists, including musicians, who have long languished in the shadow of unfair treatment by streaming services like Spotify. 

Finding an artist you are already a fan of on the NFT marketplace can be a bit of a challenge as the industry is still in its infancy. While several well-known artists have taken to NFTs, many have yet to. That said, thousands and thousands of artists sell them, giving you a great chance to discover artwork and creatives you might never have otherwise come across. 

An excellent place to start looking is Undervalued, our weekly series that lists existing NFT projects and artists that we think are well worth your time and deserve more attention from the NFT community. You can also check out Upcoming Drops, our weekly breakdown of notable projects that are launching in the near future. 

Another good way to find artists and projects is by following well-known collectors in the NFT space. RAC, Zeneca_33, 4156, Anonymoux, Jason Bailey, Mike Darlington, DeeZe, Gmoney, Misan Harriman, Illestrater, Mondoir, Lady Phe0nix, NFT Girl, 6259, Pablo Rodriguez-Fraile, Brett Shear, and 33NFT, are just some of the space’s well-respected collectors. For more information on these and other influencers in the NFT community, check out the NFT100, our annual list of some of the most notable tastemakers, builders, innovators, and leaders in the space. 

Finally, one of the simplest ways to explore the NFT world is to go to an NFT marketplace like OpenSea, LooksRare, Nifty Gateway, Magic Eden, and others and simply browse through their artists and projects. While quite random, it’s a great way to serendipitously stumble upon projects in the space. 

If you want an NFT collectible

NFTs have made it a great time to be someone who likes collectibles, having taken the concept behind things like trading cards and moved it into the digital era. 

NBA Top Shot is probably the best example of this. NBA Top Shot is a blockchain-based virtual trading card platform from a collaboration between Dapper Labs, the NBA, and the NBA Players Association. The collectibles, called Moments — which are NFTs of various NBA highlights — are traded on the Top Shot marketplace and vary in their rarity. Top Shot users are some of the most passionate about collecting memorabilia, and many of them bank on the value of their collections growing over time. 

Basketball fans can also collect The Association NFTs, the NBA’s version of digital trading cards, compared to the captured highlights of Top Shot. 30,000 NFTs were minted during the recently-ended 2022 NBA playoff run, amounting to 125 editions per player. The NFTs are connected to live data feeds for each team and player and update automatically; even the players’ appearances will change as these stats evolve. 

For baseball fans, there’s the MLB ICON Leadoff NFT collectibles project, a partnership between digital collectibles company Candy Digital, Major League Baseball, and MLB Players Inc. Featuring 720 players, the collectibles’ stats will be updated as the season progresses, turning the NFTs into a baseball card that is never quite the same from one moment to the next. Each card comes with various distinctions and rarity levels. 

Collectors can also buy Play of the Day NFTs, similar to NBA Top Shot’s Moments. Each day during the regular season, a moment will be picked and made available as an NFT for a limited amount of time the following day. 

Tennis fans can check out 3-time Grand Slam champion Stan Wawrinka’s Ballman Project (which he helped build) on OpenSea. Consisting of 6,200 unique 16-bit trading cards, the project has done 205 ETH (almost $250,000 at the time of writing) in trade volume. 

Apart from sports-related projects, many of the NFT projects, like PFP projects, can be considered collectibles as well, but we’ll dive into those later.

If you want to invest in NFTs

If you’re hoping to get in on the ground floor with the next multimillion-dollar NFT project, it’s going to require a lot of research and legwork. To begin with, if you’re trying to buy an NFT as an investment, it’s important to remember that there has been an extreme rise in NFT scams and fraud. Even some of the most well-known individuals and organizations have been caught promoting NFT scams or behaving unethically. So it’s essential to learn how to research projects properly before you start. 

There are five main things to keep in mind when determining if an NFT project is legitimate or not. 

Firstly, check who’s behind the project. Are they well-known in the space? How long have they been active in the community? When were their NFT marketplace accounts created? Vetting (to the degree that you can) artists and project developers is a key point of focus here.

Secondly, check their social media following and look for excessive numbers, which is a good indicator of fake followers. Spend a few days clicking around the project’s Discord. Get a feel for the community and, most importantly, the developers. Are they answering people’s questions? Do they have information about official links, roadmaps, and sneak peeks? A good rule of thumb is that a project is only as good as its community, so if you’re getting some strange vibes about that community, it’s probably best to trust your instincts and take your money elsewhere.  

Smaller projects that have the potential to grow and become something significant are your friend. You can use tools like Icy Tools and Rarity Tools to check out projects that are minting now and in the near future to decide if you want to get in on the ground floor or not. Be sure to take a look at our article on tools for tracking NFTs for a more comprehensive list. 

Thirdly, investigate the mint price. NFTs are usually priced in ETH, and the legitimate ones will most likely be priced fairly. Even Bored Ape Yacht Club, the most successful NFT project of all time, originally minted at 0.08 ETH. 

The fourth thing to note is the project’s roadmap, which consists of the goals project developers hope they will achieve once the primary sale is over. If what the developers have planned seems too grandiose to be true, it might be. Also, remember that a fair amount of legitimate projects these days are shucking the idea of a roadmap. The successful Goblintown NFT project famously strode onto the scene with the tagline, “No roadmap. No utility. No Discord. CC0.” 

Lastly, check how the community is (or isn’t) being managed. Again, the Discord is crucial. If moderators and project leaders are having unsavory interactions with the community or if there is an air of harassment or disinterest, it may not be the kind of project you want to get involved in. 

Remember, NFT markets are highly speculative. Like crypto markets, they are subject to change, sometimes drastic change. Yes, people have come out of NFT trading with huge profits, but they’ve lost big, too. Never construe anything you read online (including this guide) for financial or legal advice. Never invest more into a project than you can afford to lose. The value of an NFT or an NFT project is only worth what people are willing to pay for them, and there is no guarantee that that value will increase (or decrease) at any point in time. 

Most often, the NFTs that end up selling for millions come from PFP NFT projects. PFP NFT projects are NFTs made to be used as profile pictures on social media. They’re the perfect size and shape for profile display and have grown in popularity immensely in the last few years. In fact, the most popular PFP projects made those who purchased the items millionaires.

Finding good PFP projects starts with following respected and established collectors in the space, which you can find on our NFT100 list. You can also check out our guide on how to find the right PFP project for you, which lists projects by price and gives a sense of the ethos of the community behind the project and what they stand for.  

Speaking of community, joining one in the NFT world is one of the best parts of getting into NFTs. 

When done right, developers and artists build up a welcoming, diverse, and evolving community around their projects. And, because you’ve collected one or more of a project’s NFTs, you are now a part of an exclusive group, which always has its appeal. 

While no one thing will be true of the countless NFT communities out there, it’s generally the case that most community interactions occur in a project’s Discord. A healthy and thriving community will be at least somewhat consistently active in the Discord and feature members helping answer questions about the project and onboarding newcomers in the space to the NFT ecosystem. 

In the Discord, a project’s team will generally provide information about upcoming drops, give occasional sneak peeks into the future stages of the project, provide a space for people to share suggestions, hold AMAs with the team, and warn members about scams. Some projects will even organize IRL events and get-togethers to further foster cohesion. And if you’re lucky, the project developers and moderators will also have a sense of humor. 

If community is your focus, find a project whose art you like first. One of the best things about a community is the ability to share in your love of a project’s art. Then, take your time exploring the Discord. Even if it looks good at the outset, there are things you can only really understand after being a part of that community for days at a time. Don’t be afraid to ask questions and put yourself out there — how the team and other members respond will tell you a lot about what kind of a community it is and whether or not you want to be a part of it. 

Everyone has a different reason for wanting to get into NFTs. For some, it’s simple curiosity, which is as good a place to start as any. Whatever you’re looking for, make sure you do your research. If you can navigate the space with a healthy awareness of the risks, you’re more likely to end up having a great time. Web3 is a great place to be, after all. 



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