NEW YORK — Day two of the trademark infringement trial between Hermès and Mason Rothschild shed some light on the luxury house’s plans for the metaverse, while the building blocks of the artist’s career and the financial allure of non-fungible tokens were among the items discussed.
In January 2022, Hermès sued Rothschild after he released a collection of 100 MetaBirkins, NFTs of colorful, phony fur-covered handbags that were inspired by the luxury house’s iconic Birkin bag. A motion to dismiss by Rothschild was rejected in March and the jury trial started Monday in the Southern District Court of New York with Judge Jed Rakoff. The case is among the first that could lay the groundwork as to how the courts will handle trademark law in relation to NFTs.
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The jury had a lot to consider Tuesday, as three key witnesses addressed myriad subjects including the nebulous connection between art, fashion and technology, as well as how variations of that combination relate to intellectual property and constitutional law. Attorneys for and executives at Hermès have alleged that some consumers mistakenly thought the MetaBirkins derived from Hermès and that its brand has been diluted. Rothschild’s legal team has contended that his work and artistic expression are protected by the First Amendment and the MetaBirkins were two-dimensional digital artwork — and not three-dimensional wearables geared for the metaverse.
The artist, who took the stand for the first time Tuesday afternoon, said the driving force behind NFTs’ popularity is that they give back to artists (through a percentage of royalties) in perpetuity. That is not the case for other (pre-NFT era) artists such as the relatives of the late artist Jean-Michel Basquiat, who manage his estate, and won’t be receiving the millions in dollars from royalties that their work is worth, Rothschild said with a laugh.
As for his intentions in creating the controversial NFTs, he said he wanted to create an art project, reflect the fur-free initiative that was taking hold in the fashion industry at that time and to create that same value for the digital handbags. Responding to one of his attorneys, Rhett Millsaps of Lex Lumina, Rothschild said he hoped to make money from the project, but he never sought to mislead anyone and felt it was important to let people know that he was the artist behind the work. Rothschild, whose given name is Sonny Estival, said that art and fashion “definitely intersect,” adding that he believes that fashion is a form of art.
Earlier in the day, Nicolas Martin, group general counsel for Hermès, presented a different viewpoint, describing the Birkin as the company’s most important trademark, and one that is so “invaluable” that a specific figure has never been attached to it. The Birkin trademark is registered in more than 60 countries, including in the U.S. Citing the handbag’s rectangular shape, leather flap, metal pieces, swivel clasp, and lock as some of its defining features, Martin said that 96 percent of the leather that is used for Birkin bags is repurposed from waste from the food industry. That point was later challenged by one of Rothschild’s lawyers, who addressed the scarcity of fur Birkin bags.
Asked for evidence of consumers’ alleged confusion over the MetaBirkins by a member of Rothschild’s legal team, who also serve as the artist’s agents, Martin cited testimony that had been given by Hermès Americas president and chief executive officer Robert Chavez Monday, who had noted that while guest lecturing in 2021, students at Columbia University and Harvard Business School had asked if the company was involved with the MetaBirkins.
Like Chavez, who had said Hermès has its own plans for the metaverse and NFTs, Martin mentioned that the company is exploring creating a miniverse, where individuals can interact. Although he said that he did not know the specific plans, Martin said the idea of digital twins could involve being attached to a physical code that details the story and authenticity of a bag. Another example might be to sell an Hermès scarf with an NFT that gives the buyer access to an event. Noting how Hermès’ trademarks are its “main asset,” Martin said it is equally important to protect them in the digital world. Hermès executives have stated repeatedly how the Birkin is the company’s bestselling product and has generated more than $1 billion in sales in the past decade.
Although the company has not officially delved into NFTs, it expects Web3 to be an important part of its future. Hermès is also keeping up-to-date about the fashion industry’s interpretations of the digital world, with Gucci, Louis Vuitton, Balenciaga, Prada, Nike and Adidas being cited as examples of brands that have already dived in.
During his cross-examination, Martin was reminded by Millsaps of other artists who have drawn inspiration from the Hermès brand such as Tom Sachs, who created a rocket. The attorney also specified that an image of a crocodile and fur Birkin bag that had been presented by Hermès’ legal team could not have been made from waste from the food industry.
In mapping out his career, Rothschild said he first started visiting museums quarterly as an adolescent when his father worked in security at two different ones in California. After two semesters he dropped out of college and continued to work in retail, first at Dior in San Francisco and then at Saint Laurent in Beverly Hills. After the latter’s creative director Hedi Slimane exited, Rothschild did too, despite not having lined up another full-time job or having known Slimane personally. The 28-year-old Rothschild also spoke of working at the RSVP Gallery and how influential its interdisciplinary cofounder Virgil Abloh was on his career, as well as “everybody in my age group or friend group.”
He described Terminal 27, the concept store that he and his fiancée opened in Los Angeles in March 2021 with the help of a Japanese investor. The space specializes in art, designer fashion and “throwing some of the best parties in L.A.,” Rothschild said. Terminal 27 typically hosts 40 events a year, and sells $500,000 worth of physical art and $250,000 worth of digital art. The couple now own the store outright and plan to open a second location in Japan this year that will be owned by their Japanese investor.
Earlier Tuesday, Nichols College’s endowed professor of data science Kevin Mentzer challenged the idea that NFTs are digital art and that they are collectibles, explaining that he considers art to be the “Mona Lisa” and collectibles are a baseball card. After Millsaps asked if he considered Andy Warhol’s series of Campbell soup cans to be art, Mentzer said he would consider those to be art, because he grew up being told they were and the groundbreaking nature of them.
The trial resumes Wednesday with Rothschild due back on the stand.