Over the past month, the fashion and digital artist communities have been abuzz over the recent jury verdict in Hérmes International v. Rothschild, a trademark infringement case heard in the Southern District of New York. Legal issues aside, the story had much to vouch for it: a high-fashion juggernaut as Goliath, a self-styled cultural critic as David, the world’s most expensive and iconic handbags, and of course Web3. It is likely that these dynamics will reappear as established fashion houses and other retailers fight for relevance and consumer dollars in still-developing online marketplaces.
First, a recap of the issues at play in Rothschild. Around December 2021, Mason Rothschild created a digital image and associated nonfungible token (“NFT”) called “Baby Birkin,” which depicted a Birkin-like bag containing an artistically rendered fetus. Soon thereafter, he created a collection of NFTs titled “MetaBirkin” which featured digitally rendered, Birkin-like bags covered in fur. After their initial sales, the NFTs began to trade for prices of up to $40,000, similar to some of Hérmes’ physical Birkin bags. NFTs are “units of data stored on a blockchain that are created to transfer ownership of either physical things or digital media.” While that means that the NFT and the images themselves are separate things, I will refer to the combination of both as NFTs. Soon thereafter, Hérmes filed suit alleging, among other things, a violation of Lanham Act trademark protections. The court applied the test developed in the Second Circuit case Rogers v. Grimaldi, which states that the title of a piece of artistic expression will only violate trademark protections if it has no artistic relevance or, having some, is deliberately designed to mislead consumers as to the origin of the work. The second prong of this test was buttressed by eight factors from Polaroid Corp. v. Polarad Electronics Corp., which aim to determine the likelihood of confusion stemming from the adoption of a mark. After both sides failed on cross motions for summary judgment, the jury rendered a verdict in favor of Hérmes in February 2023.
While we cannot know how much weight the jury placed on any factors at play, the court’s orders on the motions shed some light on issues likely to be salient in the future. For example, the denial of Rothschild’s motion to dismiss alludes to his previous statements that he wanted to see if people would place the same value on MetaBirkin NFTs as they did on physical Birkins, which suggests an inherent reliance on the established goodwill and value attached to the Hérmes product. However, this does not necessarily cut against Rothschilld; after all, Rothschild would have to somehow refer to the brand name to prove his artistic thesis that people value brand names attached even to intangibles. Perhaps more damning was a statement made by Rothschild to investors that he was “in a rare position to bully a multibillion dollar corp[oration],” suggesting a malicious intent. Similarly, the court considered evidence that Rothschild intended to explicitly mislead consumers into assuming an affiliation between MetaBirkins and Hérmes; indeed, the record shows that some consumers and even media outlets may have assumed that Hérmes was behind the project. I think it is more likely that looking to another of the Polaroid factors may indicate what most troubled the jury, the likelihood of Hérmes moving into the NFT space. As other luxury brands have launched their own Web3 projects, it is reasonable to assume that Hérmes may one day do so and does not wish to be “beaten” to the market by an unaffiliated project. The jury may have felt that it would be inequitable to allow Rothschild and future digital artists to compete freely with established trademark holders in the marketplace by releasing products under the cover of artistic expression.
Despite the novelty of the technology in this dispute, it is worth noting how neatly decades old trademark law applies. The apparent challenge of comparing a physical good to a digital one appears not to have phased the district court, although there is always the possibility that an appeal will add wrinkles to the story.
 Dhani Mau, Making Sense of the Hérmes v. Rothschild Metabirkins Verdict, Fashionista (Feb. 9, 2023), https://fashionista.com/2023/02/hermes-metabirkins-nft-lawsuit-explainer [https://web.archive.org/web/20230222223844/https://fashionista.com/2023/02/hermes-metabirkins-nft-lawsuit-explainer] [https://perma.cc/Q8MX-HSUC].
 Hermes Int’l. v. Rothschild, 603 F. Supp. 3d 98, 101 (S.D.N.Y. 2022).
 Id. at 100.
 Id. at 103-104.
 Id. at 106.
 See Hermés Int’l. v. Rothschild, No. 22-CV-384 (JSR), 2023 WL 1458126, at *1 (S.D.N.Y. Feb. 2, 2023); Erin Mulvaney, Hermés Wins Case Against Artist Who Sold NFTs of Birkin Bags, Wall St. J. (Feb. 8, 2023), https://www.wsj.com/articles/hermes-wins-case-against-artist-who-sold-nfts-of-birkin-bags-11675884201 [https://web.archive.org/web/20230222224946/https://www.wsj.com/articles/hermes-wins-case-against-artist-who-sold-nfts-of-birkin-bags-11675884201] [https://perma.cc/JEV2-KQEV].
 Rothschild, 603 F. Supp. 3d at 105.
 Rothschild, 2023 WL 1458126, at *8.
 Id. at *9.
 See id.
 Mau, supra note 1.