In recent months, the metaverse, a term that is meant to encompass a mixture of virtual reality and augmented reality, has increasingly become a conversation topic for companies and consumers. Companies have begun to invest in this space and have started staking out virtual property on platforms like Decentraland and The Sandbox. Lawsuits and trademark applications have also popped up alongside these investments. This recent legal activity indicates that the metaverse will be a critical area for companies to begin to learn about and monitor to ensure they are adequately protecting their intellectual property and avoiding risk.
In January 2022, designer Hermès sued an individual named Mason Rothschild in the Southern District of New York for his creation and sale of “Metabirkins,” which are non-fungible tokens (“NFTs”) that resemble fur-covered versions of Hermès’ iconic Birkin bag. Among other things, the complaint alleges that Rothschild has engaged in trademark and trade dress dilution and infringement by selling his NFTs, one of which has already sold for $40,000, just as one would by selling a counterfeit physical bag. Interestingly, Hermès’ complaint notes that the defendant’s activity is preempting Hermès from entering the NFT market itself.
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