Hermès International v. Rothschild

In trademark suit of first impression in which plaintiff Hermès alleged that defendant’s creation of “MetaBirkin” NFTs infringed plaintiff’s Birkin trademarks, district court denies cross-motions for summary judgment, holding that Rogers v. Grimaldi test applies to NFTs associated with defendant’s digital images and that genuine factual disputes under Rogers test preclude summary judgment.

Plaintiff, luxury fashion house Hermès, owns trademark and trade dress rights in the iconic Birkin handbag. In December 2021, defendant Mason Rothschild created a collection of digital images he called “MetaBirkins,” each of which depicted an image of “a blurry faux-fur-covered Birkin handbag.” Rothschild used non-fungible tokens (NFTs) to sell the digital images to individual buyers. Here, each of the NFTs represented sole ownership of a particular MetaBirkin, i.e., a unique digital image of a Birkin handbag rendered by Rothschild. In response, Hermès brought suit against Rothschild, asserting trademark infringement, trademark dilution, cybersquatting and unfair competition claims. Hermès alleged that it has developed potential uses for NFTs as part of its business strategy for years and that Rothschild’s activities constitute unfair competition.

In their cross-motions for summary judgment, the parties asked the court to determine whether the digital images underlying Rothschild’s NFTs should be evaluated under the Second Circuit’s Rogers v. Grimaldi test for trademark infringement by an artistic work or under its Gruner + Jahr Printing & Pub. Co. v. Meredith Corp. test for general trademark infringement. The court held that the Rogers test applied. As to whether Rothschild’s NFTs constituted trademark infringement and dilution, the court held that summary judgment was precluded by remaining genuine issues of material fact.

Rogers sets forth a more speech-protective test, in line with the First Amendment, for when trademark infringement is alleged with respect to the use of a trademark in a work of “artistic expression.” District courts within the Second Circuit have held that such artistic expression exists whenever the work is “plainly expressive” and the plaintiff’s trademark is “not used as a source identifier.” In short, the key to whether Rogers applies is whether the trademark was used to further “plausibly expressive purposes” and not to mislead the public about a product’s origin or suggest a party’s endorsement or affiliation. 

At the motion-to-dismiss stage, the court had determined that the Rogers test applies to Hermès’ claims because, on the pleadings, Rothschild’s MetaBirkins “could constitute a form of artistic expression.” Here, at the summary judgment stage, the court reached the same conclusion because Rothschild identified admissible evidence that Rothschild’s use of Hermès’ marks did not function primarily as a source identifier that would mislead consumers into thinking that Hermès originated or endorsed his MetaBirkins collection; rather, it also functioned as “part of an artistically expressive project.” The court reasoned that the title MetaBirkins should be understood to refer not only to the NFTs but also to the digital image with which each NFT is associated, since consumers purchase NFTs with the intent to exclusively own the underlying original content associated with the NFT.

The court applied the two-prong Rogers test, which provides that an artistic work is protected by the First Amendment from a trademark infringement claim unless the plaintiff can show that either (1) the use of its trademark in an expressive work was not artistically relevant to the underlying work or (2) the trademark is used to “explicitly mislead” the public as to the source or content of the underlying work. Noting that the application of the Rogers test depends upon whether the trademark was used to further “plausibly expressive purposes” and not to mislead the public about a product’s origin, endorsement or affiliation, the court found that Rothschild had identified evidence that his use of Hermès’ marks functioned as “part of an artistically expressive project.” The court found a genuine issue of material fact under each prong and therefore denied each party’s motion for summary judgment.

As to the first prong, a showing of artistic relevance is met “unless the use of the mark has no artistic relevance to the underlying work whatsoever” and was instead chosen merely “to exploit the publicity value of the plaintiff’s mark or brand.” Whether a defendant’s use of a plaintiff’s trademark is artistically relevant to its work is “a mixed question of law and fact,” which is generally well suited for jury determination and not summary judgment. Here, the court found there was a genuine factual dispute as to whether Rothschild’s decision to center his work on the Birkin bag stemmed from genuine artistic expression or, rather, from an unlawful intent to cash in on a uniquely valuable brand name.

As to the second prong, even where the use of a trademark bears some artistic relevance to an underlying artistic work, the First Amendment does not shield such use from an infringement claim if it “explicitly misleads as to the source or the content of the work.” A work is “explicitly misleading” if it “induces members of the public to believe” that it was created or otherwise authorized by the plaintiff. To assess this prong, the court applied the Polaroid factors used to determine the likelihood of consumer confusion in a trademark infringement claim, with the important qualification that the “likelihood of confusion” assessed under these factors “must be particularly compelling to outweigh the First Amendment interest recognized in Rogers.” The court reasoned that in most cases analyzing Rogers, including this one, genuine issues of material fact would remain with respect to many of the factors, even at the late stages of litigation. For example, the parties strongly disagreed over whether consumers were confused about Hermès’ association with the MetaBirkins project. Therefore, the court denied summary judgment under this prong’s analysis too.

Because Hermès’ remaining claims for trademark dilution and cybersquatting depend on the ultimate resolution of the Rogers test, the court concluded that summary judgment would be premature on those claims too.

Summary prepared by Melanie Howard and Brandon Zamudio