In the recent article, “Why Hermès’ MetaBirkins Lawsuit Has High Stakes for Brands and Creators”, featured in The Business of Fashion, Partner Preetha Chakrabarti expands upon her insights from the her previous blog posts on non-fungible tokens (“NFTs”) and the metaverse. Previously, Chakrabarti reported on how the designer, Hermès, sued an individual named Mason
Earlier this year, Hermès filed a trademark infringement suit against Los Angeles-based designer Mason Rothschild for creating and selling faux-fur digital renditions of the luxury Hermès Birkin handbags and using a collection of 100 NFTs, titled “MetaBirkins,” to authenticate the digital images. In response, Rothschild filed a motion to dismiss Hermès’ trademark infringement claim under the Rogers test on the basis that the digital images of the Birkin bags are “art” and, therefore, receive First Amendment protection. Hermès opposed, arguing that the Polaroid factors— instead of the Rogers test—should apply, to assess likelihood of confusion. On May 18, 2022, the court denied Rothschild’s motion to dismiss, concluding that: (1) the Rogers test applies to the trademark infringement analysis of the “MetaBirkins” title, and (2) the Polaroid factors apply to the explicit misleadingness analysis.…
In a recent Law360 article titled, “Meta Logo Suit May Test How Virtual TM Disputes Unfold,” Partner Preetha Chakrabarti provided her insight on a lawsuit against the similarity between Meta’s infinity-loop logo to a Swiss blockchain company’s logo and the increase in moving, multidimensional logos in the digital space. In the article, Chakrabarti emphasized the…
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.
Continue Reading See You in the Metaverse: What Brands Need to Know
In a recent Law360 article titled, “Navigating NFT Brand Management Risks And Rewards,” David Ervin, Kayvan Ghaffari and Carissa Wilson explain what brand and business owners should know about NFT opportunities and corresponding risks, particularly with respect to trademark, licensing, anti-counterfeiting and advertising law.
NFTs (non-fungible tokens) hit the scene in 2017 with CryptoKitties, a game on the Ethereum blockchain for buying, selling, and breeding digital cats. Clearly, CryptoKitties represents a humble start for NFTs, the technology that has since captured astonishing public and media attention. More recent NFTs—like the NFT-based digital artwork by Beeple that sold at Christie’s for $69 million last month—demonstrate the rising importance of these novel digital assets.
Each NFT is a one-of-a-kind digital information file typically associated with a digital image, like an artwork, video, gif, tweet, or even event ticket. At least in theory, NFTs can also be created for physical objects, a possibility just beginning to gain meaningful attention.
Where associated with a digital image, the NFT does not generally contain the image but functions like an integrated smart contract with a link to the image file. This smart contract uses blockchain technology to track changes in ownership and affirm authenticity, much like a digital provenance. NFTs also contain a feature that can disseminate royalties whenever the NFT is sold, exemplifying the design flexibility and diverse functionality of these assets.
NFTs are a new form of non-tangible property with substantial implications in the art, entertainment, fashion, and marketing/advertising realms. Individuals and businesses operating in these spaces should carefully consider the merits of NFT platform or portfolio ownership and should anticipate new applications of and perhaps changes to existing bodies of law, like copyright and false advertising, that will address NFT issues.
Continue Reading NFT Risks and Opportunities in the IP, Advertising, and Brand Management Spaces
On March 4, 2021, the Federal Circuit spoke pointedly on its view of contract interpretation and contract obligations in the context of trademark licensing agreements between private and government actors. In Authentic Apparel Group, LLC v. United States, No. 2020-1412 (Fed. Cir. Mar. 4, 2021), the court upheld the Court of Federal Claims’ decision, on summary judgment, that the Army did not violate its obligations under a trademark licensing agreement with Authentic Apparel Group, LLC (“Authentic”). Authentic, the licensee, claimed that the Army violated the terms of the licensing agreement by refusing to approve certain products and marketing materials bearing Army trademarks. These included a proposed shoe line and an advertisement featuring Dwayne “The Rock” Johnson. The Federal Circuit disagreed.
The Federal Circuit emphasized the plain language of the trademark licensing agreement, which granted the Army “sole and absolute discretion” to approve or deny Authentic’s proposed uses of the Army’s marks. Additionally, an exculpatory clause provided that Authentic would have no cause of action based on the Army’s exercise of this discretion in failing or refusing to grant approval. “Contracting parties,” the court noted, “including parties who contract with the government, are generally held to the terms for which they bargained.” This precept does not change merely because the subject matter of the contract is a trademark.
Continue Reading Deep Sixed: Federal Circuit Boots Trademark Licensee for Meritless Claims Against U.S. Army
On March 10, Crowell & Moring’s ITC Section 337 practice co-lead, Josh Pond, and counsel, Preetha Chakrabarti, will lead a discussion titled, “2021: Year of the Knockoff – Counterstrategies at the U.S. ITC & Beyond.”
The COVID-19 pandemic has led to an exponential rise in e-commerce, as well as counterfeiting. With it harder…
On December 18, 2020, the Ninth Circuit Court of Appeals held that “Oh, the Places You’ll Boldly Go!,” a Dr. Seuss and Star Trek mashup illustrated book, is not a fair use exempted from copyright liability. Under the Copyright Act of 1976, the factors courts assess in determining if there is fair use include:
On November 30, 2020, New York Governor Cuomo signed into law a bill that will allow estates and representatives of deceased individuals to defend their names and likenesses from commercial exploitation, allowing their estates to continue to control and protect their likeness after their death. The new law, which establishes a “Right to Publicity” for deceased individuals who were domiciled in New York at their time of death, allows these individuals to that have commercial value, including their name, picture, voice, or signature, against unauthorized use.
In connection with the new post-mortem right to publicity, Governor Cuomo stated, “In the digital age, deceased individuals can often fall victim to bad actors that seek to capitalize on their death and profit off of their likeness after they pass away – that ends today. This legislation is an important step in protecting the rights of deceased individuals while creating a safer, fairer New York for decades to come.” The new post-mortem right of publicity applies up to 40 years after the death of the deceased personality, and it provides certain exceptions, such as for works of art or political interest, parodies and satires, and the use of names and likenesses in the news.
In enacting this law, New York joins the minority of U.S. states which recognize a post-mortem right of publicity, an area of law that has long been controversial and which has resulted in extensive discussion of choice-of-law rules.
Continue Reading ‘Imagine’ This: John Lennon Would Have Received Post-Mortem Right to Publicity in New York