NFT and trademark infringement in the virtual world: Hermès wins lawsuit over 'Metabirkins'

A case from digital jurisprudence on trademark infringement and dilution, cybersquatting and damage to corporate reputation 24 February 2023

This ruling, relating to one of the first lawsuits filed in the field of trademarks and NFTs (Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 – SDNY), provides some interesting legal insights, while recognizing real trademark rights, even in the digital dimensions of Web 3.0.

With the advent of the Metaverse and the creation of ad hoc platforms for the sale of NFTs, several fashion and non-fashion brands have implemented targeted marketing strategies, devising digital product collections. As was the case with the rapid spread of Internet 2.0 (which led consumers to make daily use of the numerous online marketplaces and e-commerce), a number of critical issues concerning counterfeiting and IP infringement emerged immediately.

The use of these new digital markets, in fact, raised several questions and the need to understand whether, in order to maintain exclusive rights on their trademarks, brands should have extended such protection also to the virtual world, through the filing of new trademark applications, specific for digital goods/services (the latter included in the 12th edition of the Nice Classification – in force as of 1 January 2023 – Class 9 for “downloadable virtual goods including NFT”; Class 35 for “retail shops for virtual goods”; Class 41 for “entertainment services in virtual environments”).

The New York Court, ruling in the case, recognized the nature of real-world trademark rights also in the virtual world, defining the digital works, called MetaBirkin, as unauthorized copies of the French maison's renowned handbag.

This ruling constitutes an important first step in defining the enforcement of IP rights in such new scenarios and will certainly be the subject of future interesting updates, in the disputes that will emerge following the expansion of the Metaverse markets, NFTs and the proliferation of new 3.0 counterfeits.


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