The line between art made from existing products and brands has always been murky, and it is likely going to be a never ending question. Warhol’s pop culture prints. Dom Pérignon in Cédric Peers’ work. MSCHF’s “Wavy Baby” shoes. And now we can add NFT trademark infringement — NFTs using digital representations of existing trademarks — into this mix.

How will such artwork be treated, legally speaking? We now have at least some precedent in the form of Hermès International v. Rothschild.

On Wednesday, February 8, a federal jury in Manhattan ruled that artist Mason Rothschild’s “MetaBirkin” NFTs, which depict the popular line of Birkin bags in colorful fur, violated the rights of Hermès, the French fashion house that owns the Birkin bag trademark.

What was the actual verdict? And why did the jury side with the trademark holder?

Consumer Confusion Likely to Result from “MetaBirkins”

The jury found Rothschild guilty of trademark infringement, dilution, and cybersquatting. They also found that the First Amendment protection did not bar liability and awarded a total of $133,000 in damages to Hermès.

The jury’s reasoning: they found that the artist’s digital representation of the bags – covered in colorful fur, no less – were likely to result in confusion for consumers.

In other words, people might see his “absurdist statement on luxury goods” and believe that they are real bags that are actually available to purchase.

A “Terrible Day for Artists and the First Amendment”

That is according to Rothschild’s attorney, and it is difficult to disagree with the first part of that statement, at least. Certainly, this case seems to limit artists’ First Amendment right to expression by limiting how they will be able to use brands and products with registered trademarks in NFTs going forward.

Of course, this being one of the first cases of its kind involving NFTs, only time will tell if it will be seen as precedent-setting – or if the ruling ends up as a blip on the path of NFT artists obtaining more leeway in freedom of expression.

We will definitely be watching for more of these types of cases over the next few years to see which way the winds are blowing.