The convergence of fashion, digital art, and blockchain technology has ushered in a new frontier, virtual fashion. With the explosive rise of non-fungible tokens (NFTs), questions surrounding intellectual property rights have become more pressing than ever. One of the most pivotal legal battles in this space was the MetaBirkin case, where the clash between artistic expression and brand protection took center stage. The lawsuit filed by Hermès against digital artist Mason Rothschild set a precedent in determining how traditional IP law applies to virtual goods and the metaverse.
The Origins of the Dispute
In December 2021, American digital artist Mason Rothschild launched a collection of 100 NFTs titled “MetaBirkins.” These digital tokens portrayed Hermès’ iconic Birkin bags, modified with faux-fur textures and rendered in vibrant colors. Despite their stylized presentation, Rothschild used the name “MetaBirkin,” directly invoking Hermès’ trademarked Birkin mark. According to Rothschild, these works were commentary on luxury consumption, animal cruelty, and the contradictions within the fashion industry.
However, Hermès perceived Rothschild’s work as a direct infringement of their trademark rights. The fashion house argued that the NFTs capitalized on the Birkin brand’s goodwill, created confusion among consumers, and undermined Hermès’ ability to enter the NFT marketplace in the future. In January 2022, Hermès filed a lawsuit in the U.S. District Court for the Southern District of New York, alleging trademark infringement, dilution, unfair competition, and cybersquatting.
Artistic Expression vs. Trademark Protection
At the heart of the legal battle was the tension between the U.S.A’s First Amendment and trademark law. Rothschild relied heavily on the Rogers v. Grimaldi[1] test, a judicial standard crafted to balance trademark rights with the freedom of artistic expression. Originating from a 1989 Second Circuit decision, the Rogers test was designed to protect expressive works, such as films, books, and art, from undue trademark restrictions, provided certain conditions are met.
Under the Rogers test, the use of a trademark within an expressive work does not amount to infringement if two key criteria are satisfied:
- Artistic Relevance – The use of the mark must have at least minimal artistic relevance to the underlying work. It does not need to be central or highly significant, but it must not be arbitrary or unrelated.
- Non-Misleading Use – The use must not explicitly mislead consumers as to the origin, sponsorship, or endorsement of the work. In other words, the expressive use should not cause consumer confusion about whether the trademark owner is associated with the work.
This test attempts to strike a careful balance between protecting a trademark owner’s rights and ensuring that artists, filmmakers, authors, and digital creators retain the freedom to comment on, critique, or reference cultural symbols, including trademarks, within their works. However, courts apply it cautiously, especially when commercial motives or potential consumer confusion are apparent.
Rothschild analogized his work to Andy Warhol’s Campbell’s soup can art, commercial imagery repurposed to critique societal themes. The NFTs, he contended, were not handbags but digital artworks intended to stimulate thought and debate about materialism and ethics in fashion.
Hermès, in turn, disputed this characterization. They argued that Rothschild’s use of the Birkin mark was not just artistic but commercial and intentionally misleading. The NFTs were sold for significant sums on digital marketplaces, and Hermès produced evidence of consumer confusion, with some buyers believing the MetaBirkin project was either authorized by or affiliated with Hermès.
The Verdict and Its Implications
In February 2023, a New York jury returned a verdict in favor of Hermès, finding Rothschild liable for trademark infringement, dilution, and cybersquatting. The court awarded Hermès $133,000 in damages and rejected Rothschild’s defense that the NFTs were protected purely as artistic speech under the First Amendment.
This decision was monumental. It confirmed that traditional trademark protections extend to virtual and digital realms, including NFTs and metaverse-based platforms. The verdict also indicated that courts are willing to scrutinize the commercial underpinnings of expressive works, especially where the use of protected marks may mislead consumers or obstruct a brand’s legitimate digital expansion.
The Appeal and the Rogers Test Revisited
Unsurprisingly, Rothschild appealed the decision to the U.S. Court of Appeals for the Second Circuit, reigniting debate over how the Rogers test should apply in the digital context. Rothschild maintained that his MetaBirkin NFTs were expressive works with artistic relevance and did not explicitly mislead consumers. He argued that the district court misapplied the Rogers standard by focusing too heavily on commercial aspects and not enough on his intent to critique.
Crucially, Rothschild cited his use of a disclaimer clarifying that Hermès was not associated with the project. He claimed that such a measure was sufficient to negate any likelihood of consumer confusion. Further, he warned that the jury verdict risked curtailing future artistic expression by punishing artists who incorporate branded imagery into conceptual works.
Hermès, however, argued that the lower court had correctly applied the law, especially in light of the U.S. Supreme Court’s ruling in Jack Daniel’s Properties, Inc. v. VIP Products LLC. In that case, the Supreme Court limited the application of the Rogers test where the accused party used a trademark as a “source identifier” for their own goods. The court held that expressive works are not immune from trademark scrutiny if the mark is being used as a brand in itself.
The Second Circuit’s Oral Argument: Jack Daniel’s, Rogers, and Rothschild’s Intent
During oral argument, the Second Circuit panel engaged deeply with how the Jack Daniel’s precedent affects the MetaBirkin dispute. Judge Denny Chin specifically questioned whether Rothschild had used the Birkin mark as a trademark for his own line of digital goods, a use that could remove the shield of the Rogers test altogether.
The court closely examined Rothschild’s intent, noting that intent is relevant under both the Polaroid factors for trademark infringement and the Rogers test. Judge Jed Rakoff, who presided over the district court case, had characterized Rothschild as a “straightforward swindler” attempting to pass off commercial products as art. This view coloured the lower court’s determination that Rothschild had used the Birkin mark as a source identifier, not merely as artistic expression.
The Vans Precedent: Another Step in Trademark Law’s Evolution
The appellate judges also considered their recent decision in Vans, Inc. v. MSCHF Prod. Studio, Inc., which bore strong similarities to the MetaBirkin appeal. In Vans, the Second Circuit found that MSCHF’s “Wavy Baby” sneakers, although allegedly parodying Vans’ iconic Old Skool shoes, used Vans’ trademarks as source identifiers. Thus, the court declined to apply the Rogers test and instead reverted to a traditional likelihood of confusion analysis.
The court in Vans emphasized that even if a product purports to be expressive, if it functions as a brand, or benefits from the goodwill of another brand, the expressive defense cannot succeed. This reasoning proved fatal to Rothschild’s case, given that his NFTs were not merely digital art installations but were actively marketed, sold, and promoted using the Birkin brand.
Metaverse IP: Legal Uncertainty and Digital Reality
The MetaBirkin case has become a flashpoint for larger legal questions regarding NFTs, virtual fashion, and trademark use in digital realms. Can a brand prevent someone from selling a virtual t-shirt bearing its logo in a metaverse game? How does one apply trademark standards when the underlying platforms are decentralized and pseudonymous?
One of the most vexing issues is the definition of “use” in a digital context. Traditional trademark law was developed in a world of tangible goods and clear channels of commerce. In contrast, the metaverse blurs lines between art, commerce, and identity. It challenges whether traditional IP doctrines like Rogers, Polaroid, or fair use can cleanly adapt to a virtual environment.
It is evident that courts are taking a conservative approach, based on established trademark laws, and brand protection rather than stretch the bounds of artistic expression. Until legislative or doctrinal clarity emerges, creators operating in the NFT and virtual goods space will need to tread carefully when invoking the names or likenesses of famous brands.
Balancing Innovation and Protection
Despite Hermès’ courtroom success, critics argue the case could set a chilling precedent. Artists, especially those engaged in commentary, satire, or cultural critique, may become hesitant to reference known brands for fear of litigation. If everything that visually resembles a branded product is treated as commercial appropriation, where does that leave transformative art?
On the other hand, brands have legitimate concerns. NFTs are not just digital files, they represent significant financial value. If creators can freely appropriate marks under the guise of “art,” it risks not only diluting brand identity but also allowing competitors to preemptively claim market share in virtual economies. Moreover, commercial use is deemed a big factor in the determination of violation of IP rights.
The MetaBirkin case is a landmark moment for intellectual property law in the age of NFTs and virtual fashion. It illustrates how legal systems are beginning to adapt to new forms of creative and commercial expression while reinforcing that traditional IP rights still carry weight in these environments. As the metaverse continues to expand, courts, creators, and corporations alike will need to navigate the delicate balance between artistic freedom and brand protection. What emerges from these legal tests will shape the future of fashion.
[1] Rogers v. Grimaldi, 875 F.2d 994 (1989)
Authored by: Ms. Shaileja Narain
Blogger, The IP Press
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