Such is the craze to colonize meta worlds with branded NFTs that there have been cases of actions that some companies have filed to protect their intellectual property rights. against alleged improper use of third parties. Among the more symbolic copyright lawsuits on which NFTs are based are those involving the iconic Boored Apes (Yuga Labs, Inc. NBA (Jeeun Friel v. Dapper Labs, et al. – July 2021) or NFTs connected to Nike shoes). (Nike, Inc. A-Fella Records, Inc. v. Damon Dash – June 2021) and last but not least the case of Quentin Tarantino (Miramax, LLC v. Quentin Tarantino et al. – November 2021).
In the context of haute couture, an interesting ruling – not only from a legal point of view – is undoubtedly that of the Southern District Court of New York in the case Hermès International et al. Fifth. RothschildsIt relates to a collection of 100 NFTs called “MetaBirkins” and in an apparent reference to the “Birkin” brand owned by the famous fashion house. Below is a summary of the case and some of the potential implications for fashion houses and legal operators.
Fashion in the Time of NFTs: All the Regulatory Aspects of a Complex Relationship
NFT and Counterfeit Risks, Context
In recent years, there has been a growing interest in DLT technologies (such as blockchain) and their possibilities: in particular, the so-called NFTs represent an unprecedented opportunity to preserve, trade and enjoy intellectual property rights. Coincidence Which, however, is matched by a series of questions Not least from a legal point of view, but also because there is no regulatory framework of reference. However, the uncertainties that accompany this phenomenon do not slow its spread in the slightest.
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Indeed, some Brand Sports, music and entertainment have already started or are about to launch ambitious projects on the NFT and metaverse that promise new or higher revenues, as well as, thanks to NFTs, digital tools that significantly protect the authenticity of branded products. According to some estimates, the luxury goods market could reach a turnover of 400 billion euros by 2030. So it is not surprising, This is me too Brand Many of the fashion world have already taken part in this “digital gold” rush To take advantage of its features and accelerate the transition towards fashion with less texture and more pixels. Think of the first incorporation cases Brand Fashion within the RTFKT crypto space (a startup later acquired by Nike) and Gucci, the first luxury brand to adopt Web3 principles by launching two NFT collections including Supergucci, finally on the first digital catwalks Metaverse Fashion Week In Decentraland Metaverse.
In short, the combination of NFTs and the metaverse will represent an indefinite market segment capable of bringing new customers and profits into the real fashion sector even through surreal worlds. On this point, an idea common to the greats player From the marketplace is to link the relevant NFT to the sale of the physical product, which can act as a digital certificate of authenticity of the item, and as an address that allows the purchase to be legally “wearing” in the virtual world. In such a context, there are many pitfalls for companies that have so far only measured themselves against the real world. In effect, the latter would have to deal with the proliferation of businesses and products in the metaverse, and protect themselves from attempts to counterfeit their products Brand Its surprisingly insidious field.
Hermes case
Around December of 2021, artist Mason Rothschild created digital images of luxury Hermès Birkin bags and sold those images as NFTs, under the name MetaBirkins. In particular, these NFTs reproduced a recreated model of the bag that, while remaining well known, had different characteristics both in material (faux leather), color, and motifs. Hermes Birkin Intellectual Property Rights Owner, complained of self-infringement by Rothschild, who – according to the company – benefited from the association between the NFTs, the famous brand and the fashion house, without any communication between the two parties. In response, Rothschild asked the court to rule on Hermès’ appeal to recognize the infringement of its trademark as inadmissible.
In other words, the question the US judge was asked to solve concerns the legality of producing NFTs without the consent of the owner of the intellectual property rights contained therein and the limits to which technical purposes can justify the use of a third party. trade mark.
Specifically, the artist maintained the legitimacy of his conduct, which was intended to be a simple homage to the iconic bag, furthermore that the use of someone else’s trademark was permitted in light of the freedom of expression endorsed by him. First Amendment to the United States Constitutionincluding artistic expressions (above all, case Rogers v. Grimaldi of 1989, which established the principle of the legality of the practice of artistic expression). In fact, the MetaBirkins, according to Rothschild, were nothing more than non-identifying digital images of Hermes products, but rather simple artifacts. Therefore, the use of the house brand was to be considered a non-commercial use protected by the First Amendment.
The Court affirmed the coherence and applicability of the precedents cited by the artist, holding that “NFTs are mere tokens indicating and authenticating the location of a digital image; the use of NFTs to authenticate an image and enable traceable resale and subsequent transfer does not deny the image First Amendment protection”, which is equivalent to selling copies Numbered from the physical plates.
However, the court Rothschild’s proposal was rejected In contrast to the Hermès appeal, where there was sufficient evidence to believe that the artist intended to associate his MetaBirkins with the Birkins brand and exploit its popularity, with the intent of actually distancing himself from mere artistic expression. Moreover, even excluding the artistic significance of MetaBirkins, the latter was misleading to the public, both as to the origin of the works and their content. As a result, trademark infringement complaints were mitigated Cyber squattinggiven by Hermes, it was to be accepted.
decision effects
The court’s decision, while not resolving the dispute, does allow us to foresee some important considerations. First, it was necessary to determine whether NFTs should be considered expressions of art or commercial products devoid of expressive character. According to the American judge: The work does not lose its artistic value once it is integrated into the NFT. In fact, NFTs are seen as tools to certify the authenticity and transfers that the underlying work undergoes, but this does not exclude the possibility of expanding the protection intended for works of art.
For this reason, the creation of digital images into NFTs may fall within the freedom of speech guaranteed by the First Amendment, but such behavior would not in and of itself be legal. In particular, the Court noted – in a footnote – further that First Amendment considerations may not apply to all technically significant digital images associated with an NFT: for example, in the case of MetaBirkins being sold as assets Almost wearable in the metaverseResulting in consumer goods resembling more than works of art, a more traditional type of analysis on trademark infringement and counterfeiting would be necessary.
Final considerations
It is almost certain that the decision of the American judge will contribute to the “making of the school”, offering several ideas also in the European context. In balancing artistic expression with protection of property rights, societal orientation tends to leave plenty of room for the former, when this is the case Do not harm the intellectual property rights holder. Generally speaking, in fact, in the event that the use of a third party’s trademark is not the main element of the business, and it therefore does not mention or inappropriately use the distinctive mark from which a commercial advantage is derived, it is permitted.
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