New York judge halts MetaBirkin NFTs sales in landmark victory for Hermès

Luxury fashion house Hermès (NASDAQ: HESAY) has emerged victorious yet again in its non-fungible token (NFT) trademark infringement lawsuit after a New York judge issued a permanent injunction halting all sales of the MetaBirkin NFTs.

The French firm has been embroiled in a legal battle for months with Mason Rothschild, the artist behind the MetaBirkin NFTs. The NFT collection depicted the luxurious Birkin bags, which the company claimed infringed on its trademark. Rothschild, in his defense, claimed that the collection was a form of artistic expression protected by the First Amendment.

In February, a New York court sided with Hermès. Judge Jed Rakoff ruled that the artist was guilty of trademark infringement, dilution, and cybersquatting. Despite the ruling, Rothschild continued to promote and sell the NFTs, leading Hermès to file a new lawsuit in March requesting a permanent injunction against any further sales.

The French company has emerged victorious yet again. Any claim Rothschild may have had to the First Amendment was waived when he used the Hermès trademark to deceive target clients, Judge Rakoff ruled.

“Defendant’s entire scheme here was to defraud consumers into believing, by his use of variations on Hermes’ trademarks, that Hermès was endorsing his lucrative MetaBirkins NFTs. Nothing in the First Amendment insulates him from liability for such a scheme.”

Rakoff noted that he had directed the jury to consider that even the “modest elements of artistic expression” entitled Rothschild to First Amendment protection. This protection, however, had to be waived if Hermès could prove that the artist deliberately misled investors, and it did.

The MetaBirkin lawsuit reignited the debate on what exactly an NFT is in legal terms. For years, artists falsely believed that branding their NFTs as “artistic expression” would protect them from IP infringement lawsuits.

However, the ruling reiterates that NFTs have value and are protected by IP laws.

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