Hermes vs. NFT Artist Could Help Define Legal Landscape for Digital Assets

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Help! He stole my purse… ‘s intellectual property rights.

Starting today, a blockchain entrepreneur whose MetaBirkins NFTs look strikingly similar to the ultra-expensive actual Birkin handbag will be going head-to-head in court with luxury designer Hermès. The case could create a precedent for digital assets and copyright law in a burgeoning world of cryptocurrencies, metaverses, and all those other things your nephew is somehow still into.

How Do You Solve a Problem like NFT?

Mason Rothschild debuted the MetaBirkin NFT, digital images of furry handbags sporting designs like the Mona Lisa, zebra hide, and smiley faces, in 2021. And despite not being able to physically carry your phone, wallet, or compact, one of the most expensive MetaBirkins goes for 100 ethereum – that’s more than $160,000 and comparable to some actual Birkin bags. Hermès is suing Rothschild for trademark infringement. His defense: The First Amendment and artistic expression.

Like many aspects of the internet and digital currencies, NFTs are not highly regulated. What guidelines exist are influenced by previous federal laws, but there’s not one solid framework. Experts are hoping the Birkin case will create more of an understanding of these types of legal battles, which are likely to become more common:

  • One of the first intellectual property rights cases involving NFTs was between Miramax and Oscar-winning director Quinten Tarantino. The grindhouse connoisseur had partnered with Secret Network to sell NFTs of his original handwritten script to Pulp Fiction, but the movie studio, which owns the rights to the film, claimed he violated copyright law. It was eventually settled out of court (with Miramax likely offering Tarantino something worth more than Marsellus Wallace’s briefcase) and further auctions for the NFTs were canceled.
  • Nike is currently suing online sneaker resale marketplace StockX for counterfeiting and false advertising because virtual shoes on its platform feature the brand’s iconic swoosh. However, in this case, each NFT is linked to a physical item, meaning if you buy one of the NFTs, you technically own the actual sneakers too even if they’re not on your feet just yet. StockX argues it is a speedy way to verify ownership for sellers looking to flip shoes quickly.

“[The Birkin case] will give us more guideposts for what to do with NFTs,” Thomas Brooke, a lawyer at Holland & Knight, told The Wall Street Journal. “With any new technology the courts are often having to apply existing law and figure out what works.”

It’s About the Music: Though the NFT market may appear like a wacky fad and complicated version of schoolyard Pokémon trades, there are benefits to adopting blockchain technology. In the music industry, even if a song gets streamed plenty of times on Spotify, a lot of that revenue goes to record labels and publishers. Many independent artists have begun selling their songs as NFTs as a way for fans to support them directly. It’s the futuristic version of throwing a buck in a busker’s guitar case.

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