The silent luxury giant Hermès and the noisy legal battle over the Birkin bag

French fashion house Hermès has not only been making headlines recently for its continued growthBut it is also in the spotlight due to its ongoing legal battles. The disputes surrounding the iconic Birkin bag are not limited to the digital world, but also raise questions about artistic freedom and the existence of a right to luxury.

Trademark law in the metaverse

Since December 2021, the luxury group has been involved in a legal battle with artist Mason Rothschild, who created a virtual “MetaBirkin” — an NFT inspired by the famous Hermès handbag. More than 100 unique iterations of the bag were available for sale on OpenSea, a peer-to-peer marketplace for NFTs, with a trading volume of $1.1 million.

Hermès cracked down on digital replicas, accusing the artist of infringing the luxury brand with his MetaBirkin. Following a letter of cessation from the fashion house, the bags were removed from the OpenSea site. The artist responded to the allegations in an open letter posted on his Instagram profile, arguing that NFTs were protected by the luxury brand’s claims.

In January 2022, Hermès filed a lawsuit against Rothschild in the Southern District Court of New York for trademark infringement.. “Hermès neither authorized nor consented to Mason Rothschild’s marketing or creation of our Birkin bag in the metaverse,” the company told the Financial Times in early December 2021.

As part of the lawsuit, the luxury goods company demanded that the artist cease operations, surrender the MetaBirkin domain name, and pay damages. The company also accused Rothschild of trying to “make a quick buck by trading on the ‘real’ goodwill of Hermès by creating and selling ‘virtual’ products.” The artist reportedly chose to sell a digital MetaBirkin because of the value of the physical bag.

Hermès won the case in February 2023, when a nine-person jury awarded the French bag maker $133,000 in damagesThe US federal court ruled that the artist’s sale of the NFTs constituted trademark infringement, even in the unregulated metaverse.

“The MetaBirkin controversy has sparked a discussion about trademark law and freedom of artistic expression. With many major fashion brands, including Nike, Adidas, Givenchy, and Karl Lagerfeld, entering the metaverse, the question of how trademark law designed for physical products applies to digital products and NFTs is increasingly relevant. As the metaverse becomes increasingly commercialized, the need for clear rules and legal certainty becomes more evident.

Read more: Law and Practice: How Protected is a Brand in the Metaverse?

The luxury brand’s legal team argued that Rothschild was seeking to make a quick profit by appropriating the MetaBirkins brand, trading Hermès’ “real world” goodwill for “virtual” goods.

Redux test?

In March 2023, the legal battle entered its second round, when Rothschild proposed to dismiss the case in court. The artist also responded to Hermès’ earlier motion for a permanent injunction, which would have required the luxury goods company to turn over all documents, including MetaBirkin’s website domain and social media accounts. The second motion for summary judgment could result in a new trial.

The legal dispute between the two sides was the first lawsuit to address the legal and creative limits of digital assets. The MetaBirkin NFTs were subject to trademark law, the jury ruled, because they could be directly associated with the physical Birkin. The debates, however, highlighted the need to tighten the boundaries between the digitalization of assets and the rights of consumers of luxury products.

Trademark Disputes in the Real World

The Hermès Birkin bag not only caused a stir in the metaverse, but also reignited the topic of brand counterfeiting in the physical world.

Berlin-based fashion label Namilia sent a reworked Birkin down the runway at Berlin Fashion Week in July 2023. The brand created a corset based on the luxury handbag for its SS24 “In Loving Memory of My Sugar Daddy” collection and subsequently faced a trademark lawsuit from Hermès.

The case was heard before the Frankfurt Regional Court, which dismissed the luxury brand’s request for a preliminary injunction. Hermès could not assert its European trademark rights in this case, the court ruled. In its judgment, the regional court invoked the right to artistic freedom. A decisive factor was that the Hermès brand was not denigrated or degraded by Namilia’s show.

The dispute continues in 2024

The conflicts surrounding the Birkin continue this year in another dimension: Hermès is now facing lawsuit in California by potential customers.

In a class-action lawsuit, they accuse the fashion house of denying them access to the exclusive handbag unless they first spend large sums of money on the company’s other luxury products. the brand.

Birkin bags are not displayed in stores and cannot be ordered online, so customers must “earn” the chance to buy one. This practice violates antitrust law, the plaintiffs say, because it artificially inflates the effective cost of the product.

This article was originally published on FashionUnited.DE. Translation and editing by: Rachel Douglass.