A jury returned a verdict yesterday of approximately $130,000 against Mason Rothschild, the creator of a series of non-fungible tokens, or NFTs, associated with digital images of Hermés’s “Birkin” handbags covered in fake fur (see our prior coverage here).

Rothschild argued that the NFTs were protected artistic expression under the First Amendment.  Judge Rakoff denied both sides summary judgment as to that and other issues, and ultimately instructed the jury that the First Amendment question turned on whether Rothchild was intentionally trying to confuse customers and thereby capitalize on Hermés famous brand, or instead created the project for artistic reasons:

It must be clear to you by now that the parties disagree about the degree to which the MetaBirkins NFTs are works of artistic expression. Mr. Rothschild contends that, because he started the project primarily for artistic reasons, the NFTs are paradigmatic works of art. Hermés asserts that any artistic expression is incidental at best and Mr. Rothschild’s real intention was to confuse people into thinking his MetaBirkins NFTs were sponsored by or associated with Hermés.

It is undisputed, however, that the MetaBirkins NFTs, including the associated images, are in at least some respects works of artistic expression, such as, for example, in their addition of a total fur covering to the Birkin bag images. Given that, Mr. Rothschild is protected from liability on any of Hermés’ claims unless Hermés proves by a preponderance of the evidence that Mr. Rothschild’s use of the Birkin mark was not just likely to confuse potential consumers but was intentionally designed to mislead potential consumers into believing that Hermés was associated with Mr. Rothschild’s MetaBirkins project. In other words, if Hermés proves that Mr. Rothschild actually intended to confuse potential customers, he has waived any First Amendment protection.

The jury appears to have agreed that the project was more about capitalizing on the Hermés brand than creating art. The NY Times write-up of the verdict is here.