Anita Gogia is a IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On on the intriguing case. engages novel issues of trademark infringement, trademark dilution, and cybersquatting (MetaBirkin.com domain name in this case) by artists in the metaverse.

Rothschild that depicted the Hermès Birkin bag in digital fur instead of leather, seemingly present in luxury handbags. The NFTs were on every further sale. After Hermès took down the NFTs from OpenSea, Rothschild moved to a different marketplace and “MetaBirkin” on Discord. Rothschild argued that “” and that the NFTs were a “” under First Amendment protection. Essentially, he argued that “MetaBirkins” were .

The jury found that Rothschild’s “MetaBirkin” NFTs . The key issue was whether the “MetaBirkin” was artistic expression under First Amendment protection, or a commercial product that causes consumer confusion. The jury concluded that while artistic expression was present, Rothschild intended to confuse consumers.

During the trial, Hermès provided evidence of actual consumer confusion which included about if “MetaBirkins” were connected to Hermès. Rothschild rejected these claims by providing that he to his website clarifying that the “MetaBirkins” were not connected with Hermès in any way and that his .

The jury was also influenced by Judge Rakoff’s reasons to deny the motion for summary judgment, and his exclusion of expert testimony. Judge Rakoff held that the test for artistic works applies where the key inquiry is This test was applied as opposed to the test, . Thus, Judge Rakoff held that the artistic relevance was present. Blake Gopnik provided expert testimony that Rothschild brought forth in this case. Had this been admitted, the jury ; thus aligning them in the artistic expression context.

Following the decision, Rothschild’s legal team that the dispute is “.” The team also pointed out Hermès’ hypocrisy as a luxury fashion brand who claim they care about artists but “.” This case has been followed by many to observe how the court resolves the issue of NFTs using intellectual property for the purpose of artistic expression. It is unknown whether this decision stands as precedent since intellectual property right disputes are significantly context-based. After this decision, artists can only conclude for certain the importance of obtaining legal advice before using IP in their NFTs, even if it is in the name of artistic expression.

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Ariel Goldberg is a 1L JD Candidate at Osgoode Hall Law School.

Usually, a dog toy’s squeak echoes throughout a home. A Jack Daniel’s bottle-shaped dog toy called “Bad Spaniels” will be heard at the U. S. Supreme Court and could bark for trademark use in expressive works. Will it bite?

Jack Daniel’s Properties, Inc.’s (“Jack Daniel’s”) petition to the U. S. Supreme Court explains that the case addresses a significant reoccurring tension in trademark and trade dress protection under the U. S.’s Lanham Act: VIP Products LLC (“VIP Products”) runs the e-commerce website . Under the shopping category “”, VIP Products sells an array of dog toys that parody existing brands’ trademarks and trade dress including a Mountain Dew bottle that reads “”, a Baileys bottle called “” and, the toy at issue, a nearly identical Jack Daniel’s Old No. 7 Brand Tennessee Sour Mash Whiskey bottle altered to say “.”

Image from .

Initially, that the “Bad Spaniels” dog toy likely causes consumer confusion and tarnishes Jack Daniel’s marks. On appeal, the decision holding that the likelihood-of-confusion test would not apply because the toy is an expressive work with First Amendment protection of freedom of speech. The Ninth Circuit applied the Rogers Test from the Second Circuit’s (1989) decision. free speech and trademark protection by allowing the use of trademarks in expressive works if artistically relevant and not explicitly misleading. Here, the trademark use was artistically relevant to the , the toy was not explicitly misleading because VIP Products altered the trade dress. The toy had a disclaimer on the back of the toy that stated that Jack Daniel’s was not affiliated.

Jack Daniel’s petition argues that the Ninth Circuit’s “” decision allowing for companies similar to VIP Products to tarnish trademarks and create mass marketplace confusion. Jack Daniel’s that the courts of appeal are divided on this issue, specifically that the Ninth Circuit’s use of heightened First Amendment Protection for humorous trademark use conflicts with the decisions of other Circuit courts. . These circuits have not used the First Amendment and instead applied the traditional likelihood-of-confusion test with consideration towards the humor or parody as a factor against the mark holder. For example, in , the Fourth Circuit held that Haute Diggity Dog’s “ successfully parodied Louis Vuitton’s handbags through applying the likelihood-of-confusion test with humour as a factor.

Essentially, Jack Daniel’s wants the U. S. Supreme Court to create a higher bar for parody works which would create more ease for mark holders to address consumer confusion and dilution from parodies. The main concern is the use of humour to gain immunity. , the academic director of Fordham University Fashion Law Institute, that “every brand with a beloved trademark is worried about seeing cheesy versions of its primary corporate asset used to sell not only dog toys, but also  a vast range of other novelties that, over time, could cheapen the perception of the brand.” In addition, that dog toys are expressive works because its purpose is to be played with by dogs.

However, the argument to raise the bar for parody works is contentious. , a professor at Harvard Law School and author of a brief opposing Jack Daniel’s , highlights that trademark law exists to protect consumers from fraudulent products rather than clear humorous uses of existing trademarks and trade dress. expressions on a canvas are not meaningfully legally distinctive from expressions on a dog toy.

The U. S. Supreme Court decision will be a significant precedent. In Mason Rothschild claimed his fur-covered Birkin bag NFTs, MetaBirkins, satisfied the Rogers Test by being artistically relevant and not explicitly misleading. Clearly, the humorous use and reworking of existing trademarks and trade dress is here to stay making Jack Daniel’s shot at heightened First Amendment protection highly relevant. Time will tell if Jack Daniel’s is barking up the wrong tree.

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Anita Gogia is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

The by Judge Rakoff for a motion to dismiss in the case of clarified the applicability of and the on NFTs containing trademarks for artistic expression.  This case has significance in the application of our current understanding of trademark infringement in the metaverse.

Suggested reading: The March 2, 2022 article titled written by Jasmine Yu was posted on IPilogue and covers the early developments and key legal issues of this case.

Background

In brief, on January 14^th, 2022, Hermès filed a complaint against Rothschild for his use of Birkin bag trademarks in his NFTs. This case differed from other counterfeit trademark infringement cases because Rothschild’s work (100 NFTs of various Birkin bags) has no physical form. Hermès these “MetaBirkins” diluted their trademarks and goodwill contrary to s. 43(a) of the and are commercialized similarly to their valuable real-life products.

The Arguments

On February 9^th 2022, Rothschild submitted a motion to dismiss. On March 21, 2022, Rothschild , where he argued that  his MetaBirkin commented “on the animal cruelty inherent in Hermès’ manufacture of its ultra-expensive leather handbags, and that the MetaBirkin is speech, art, and expression protected by the First Amendment. Harvard Law School Professor Rebecca Tushnet, representing Rothschild, .

the Rogers test from a 1989 2^nd Circuit ruling— those using trademarks for artistic expression which doesn’t explicitly mislead consumers are protected from infringement claims. The bar is high, and a slight risk that the use of a trademark suggests endorsement or sponsorship is “outweighed by the danger of restricting artistic expression”. Tushnet has also stated that anything but a dismissal of the case may have a on artists.

On the other hand, that Rogers does not apply because Rothschild’s actions of setting up an online store and the marketing materials support a goal of selling a digital good. To this, Tushnet that artists are protected in marketing their work to make a profit. Hermès also argues that in which he said that there wasn’t “much difference” between having the crazy handbag or “now” bringing that into the metaverse illustrates that the MetaBirkin NFTs are a commodity. that the court should apply the Polaroid factors to evaluate whether the use of the trademarks confuse the public.

The Decision

In May, Judge Rakoff Rothschild’s motion to dismiss, releasing detailed for his decision on May 18^th, 2022. that the Rogers test applies in this case because the MetaBirkin NFTs “could constitute a form of artistic expression”. Using the NFTs . .However, the motion was ultimately denied because the Court held that the MetaBirkin does not satisfy the Rogers test at this stage as Rothschild intended to associate the NFTs with the goodwill of their Birkin marks. that Hermès made sufficient allegations of “explicit misleadingness” and so denies the motion to dismiss. Rothschild’s argument that the court should not follow the Polaroid likelihood-of-confusion factors in assessing whether MetaBirkin explicitly misleads per Rogers.

It is notable that Judge Rakoff was influenced by Rothschild’s marketing efforts and commercial actions — this casted doubt as to whether the NFTs were meant only for artistic expression and not as commercial goods.

Although freedom of artistic expression varies globally, the inherent idea that art is interpretative and holds meaning beyond a superficial level is arguably a universal truth. The metaverse allows artists to explore a new source of income, undoubtedly increasing the volume and popularity of NFTs and other virtual commodities. Such a cultural movement illustrates the significance of this case; and while it originates in the US Southern District of New 91��ɫ, the importance transcends borders. This decision has important implications as to how courts may interpret metaverse-related trademark infringement claims moving forward.

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