Following up on the decision made on February 14, 2023, as a result of the jury’s verdict on February 2, 2023, the Southern District Court of New York rejected the request of Mr. Mason Rothschild, creator of the well-known NFTs MetaBirkins, for a judgment in his favor, or alternatively, for a new trial. The Court instead upheld Hermès’ request for a permanent injunction order that prevents Rothschild, among other things, from continuing to market the NFTs related to the Birkin artwork and from using the MetaBirkins domain.
As for Rothschild’s request for a legal judgment or a new trial, the Court firmly stated that the structure and content of the instructions given to the jury were correct.
In doing so, among other things, it made reference to the recent decision in Jack Daniels Properties, where it was decided “whether the Rogers test even properly applies to a case like this one”, and where the Supreme Court stated that: “Without deciding whether Rogers has merits in other contexts, we hold that it does not when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods”.
Which, in the jury’s opinion, “is precisely what the defendant, with his “MetaBirkins” NFTs and “MetaBirkins” website, did here”.
Interestingly, therefore, the Court affirmed that “not having the benefit of Jack Daniels Properties, this Court in the instant case not only applied Rogers, but also applied it in a way highly favorable to the defendant”.
As for the request for a permanent injunction order submitted by Hermès, the Court essentially found that:
– Hermès is entitled to a rebuttable presumption of irreparable damage by virtue of the jury’s verdict in its favor on the compensation request for trademark infringement;
– There is undeniable evidence that Rothschild continued to promote the sales of MetaBirkins NFTs on social media platforms and to execute sales on a cryptocurrency platform, therefore the financial compensation determined by the jury would not fully compensate Hermès for the damages it has suffered due to Rothschild’s continued use of its trademarks;
– Rothschild intentionally waived First Amendment protection by designing his own NFTs through the use of Hermès trademarks and with the intention of exploiting their goodwill and reputation;
– The public has an interest in not being confused about the origin of a work of art, just as it does for a consumer product.
The granted injunction order can be summarized as follows:
– Given the likelihood that the continuation of the sale and marketing of MetaBirkins NFTs would cause public confusion about the source of origin, Rothschild, and any other person who is in agreement or active participation with him, are prohibited from committing further violations, including the collection of any royalties from the MetaBirkins NFTs that have already been purchased;
– In light of the jury’s determination of Rothschild’s liability for cyber-squatting, the court ordered Rothschild to transfer to Hermès the domain name www.metabirkins.com and the related material. The order prohibits Rothschild from registering, using, or marketing any domain name, social media username, or NFT platform that uses and/or incorporates the “MetaBirkins” trademark;
– The Court ordered Rothschild to return all the profits he made from the MetaBirkins NFTs, including copyright rights or other financial benefits he received from the resale of the NFTs, with very strict accounting and payment terms;
– Rothschild must communicate the details of the order to the NFT buyers.
