Federal Jury Rules in Favor of Luxury Brand in NFT-related Trademark Suit

A Manhattan federal jury ruled in favor of luxury brand Hermès in its trademark infringement lawsuit against an individual that created non-fungible tokens ("NFTs") depicting images resembling the famous Hermès Birkin handbag. The defendant was sued by the luxury brand in connection with his creation of the "MetaBirkin" NFTs, which portrayed Birkin-style bags covered in fur (and, in one instance, depicted a 40-month-old fetus inside of a bag resembling a Birkin).

In previously denying the parties' cross-motions for summary judgment, the Court stated that the Rogers test for evaluating trademark infringement in artistic works is the applicable standard (rather than the Gruner test for commercial works). Under the Rogers test, an artistic work is generally entitled to strong First Amendment protections, but may lose the benefit of such protections if (i) the use of the trademark at issue is not artistically relevant to the underlying work or (ii) the trademark is used to mislead the public as to the source or content of the underlying work.

While the defendant argued that his "MetaBirkin" NFTs were artistic works that should be afforded applicable First Amendment protections, the jury found him liable for trademark infringement, trademark dilution and cybersquatting.