The jury trial over trademark infringement and dilution between Hermès and the artist Mason Rothschild got underway Monday in New York’s Southern District Court.
The artist is being sued by the luxury house for his digital collection of 100 fur-covered bags reminiscent of Hermès’ signature Birkin handbag in non-fungible tokens. The assortment first debuted at Art Basel in Miami in December 2021. The French company first took legal action in January 2022 alleging the artist was selling his digital MetaBirkins without authorization. Last March, the artist retaliated with his own filing, claiming among other things that his art was protected by First Amendment rights, and selling it does not diminish those rights. That appeal was later dismissed. The jury trial is being overseen by U.S. District Judge Jed S. Rakoff.
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Many are keeping a close eye on the case, as it could help clarify how trademark law will be applied to NFTs, the digital assets that are used to authenticate artwork, and First Amendment rights in the metaverse. Hermès has alleged that Rothschild tried to “rip off” its Birkin trademark by adding the prefix “Meta,” as well as its design trademark. It also floated how it already had its own plans for the metaverse and NFTs. NFTs use blockchain technology to link images with a digital identifier.
One of Hermès’ attorneys, Oren Warshavsky of BakerHostetler, stated Monday how the case came down to trademark infringement related to the nearly 40-year-old Birkin. To illustrate the craftsmanship for each bag, which requires 18 to 24 hours to make by one craftsperson, lawyers showed a few versions of the bags to members of the jury. In the opening statements, they showed text messages from Rothschild that referred to his work as “birkins” and how he had worked with another designer to create the NFTs, despite taking full credit. Jurors were also shown various social media posts that had been created to promote the MetaBirkins, including one that read, “NOT YOUR MOTHER’S BIRKIN.”
In Rothschild’s defense, one of his attorneys, Rhett O. Millsaps II, a managing partner at Lex Lumina, said repeatedly that his art and artistic expression are protected by the First Amendment. They also made the distinction that the artist had sold his NFTs for $450 each and their value increased into the thousands and “tens of thousands” of dollars with Rothschild “getting a small percentage” of those sales via the resale market.
Jurors also learned how he is a first-generation American whose mother and father had relocated to California from the Philippines and Colombia, respectively. After graduating from high school at the age of 16, he worked in retail for streetwear brands and then luxury labels like Saint Laurent and Dior. In 2021, he and his fiancée Ericka del Rosario, who was in the courtroom Monday, opened the concept store Terminal 27 in Los Angeles to much acclaim. Comparing Rothschild to the late Pop artist Andy Warhol, one of his attorneys described him as “a conceptual artist, the idea guy, not the guy who executes the job.”
In addition, the fact that Rothschild had previously used the names of design schools on T-shirts without the authorization to do so — a point that the Hermès’ legal team had brought to light earlier in the proceedings — was an example of the long history of artists deliberately blurring the lines between art and commerce, one of Rothschild’s attorneys claimed. The artist’s satire also was inspired by the fur-free initiative that was taking hold in the fashion world at that time, they claimed.
Rothschild’s legal team insisted that he had created a flat digital “imaginary” fur-covered Birkin, and alleged that this multibillion corporation was trying to punish Rothschild because it didn’t like his art and is afraid what it might say about luxury culture. Above all, they said that the artist wanted to make art, money and a name for himself. His legal teams claimed Rothschild had reached out to some reporters who had mistakenly linked Hermès to the MetaBirkins to clarify. The misinterpretation by some media outlets that Hermès was involved with the project was a point of contention for the Hermès team.
The luxury company’s lawyers, as well Robert Chavez, president and chief executive officer of Hermès Americas, said that Hermès had previously been developing its own plans to venture into the metaverse and NFTs for a few years.
A good portion of Monday’s testimony came from Chavez, who was unable to attend in person and pre-recorded his testimony earlier this month. He noted that the Birkin bag is the company’s most popular item and pretty much always has a waiting list. Hermés has sold more than $1 billion worth of Birkins in the past decade in the U.S. alone, taking in more than $100 million consistently each year. Birkins generally retail from $12,00O to $200,000. Those figures were shared several times by the Hermés legal team as well.
In highlighting his 22-and-a-half year run at Hermès, Chavez noted how its retail presence in the U.S. increased from 13 to 32 stores, a figure that includes its website. He also traced his earlier and diverse beginnings from attending public schools in San Antonio’s poorer south side before attending Princeton University, where he studied Romance languages and literature. A nine-year stretch at Bloomingdale’s led to six years at Macy’s, followed by a stint at Etienne Aigner and then Hermès. Among the insights shared by Chavez was that in addition to store visits, he works directly with consumers incognito by selling products in the stores, usually in December. However, in those circumstances there are “strict instructions” not to tell people that he is the CEO. Asked what Hermès does, Chavez said, “We are retailers. We make and sell products, mostly in our own stores.”
During his cross-examination, Chavez allowed that he was not aware of any lost revenue due to the MetaBirkins. Rothschild’s legal team also drew Chavez’ attention to an Hermès International financial analysis that indicated that its ready-to-wear and accessories category had grown at two times the rate of its leather goods and saddlery, the category under which Birkins are sold, in the first half of 2022 versus the first half of 2021.