Tag: cybersquatting

Breaking News – Hermès Makes History With First NFT Trademark Trial Victory

A New York City jury just returned a verdict in favor of Hermès in a historic dispute between the luxury fashion house and digital artist Mason Rothschild over Hermès’ alleged trademark rights relating to Hermès’ famous Birkin handbag. The jury awarded Hermès $133,000 in total damages for trademark infringement, dilution, and cybersquatting.

The jury finding that the First Amendment did not shield Rothschild from liability in connection with his MetaBirkins NFTs project is significant, particularly as this matter involved the first trial by jury to consider the interplay of free speech and trademark protection in the context of NFTs. This decision, which may be appealed, provides guidance for artists, brands, and others seeking ingress into metaverse, including to what extent “real world” intellectual property rights apply to and may be enforced in virtual worlds.

Haute-ly Contested NFTs

Throughout the dispute over this past year, the parties have contested each other’s characterization of the MetaBirkins NFTs. To Hermès, the MetaBirkins NFTs are merely the instruments of a “digital speculator” looking to exploit one of its most exclusive assets via NFTs. In contrast, Rothschild argues that the MetaBirkins NFTs project, a series of 100 NFT images that depict a range of reimagined Hermès Birkin bags featuring a variety of colorful fur, is digital art and a commentary on the famed BIRKIN bag, consumerism, and animal cruelty within the fashion industry. As a result, he argues that the MetaBirkins NFTs are artistic works that should be shielded from liability under the free speech principles of the First Amendment of the Constitution. The nine-member jury disagreed, finding that the MetaBirkins NFTs were more like commodities that are subject to trademark and other laws, rather than artwork. A factor that may have influenced the jury’s decision was evidence suggesting that Rothschild may have seen the MetaBirkins NFTs as a “cash cow.” This may have cast doubt on the authenticity of his characterization of the MetaBirkins NFTs as an art project.

The Test is Yet to Come

Although the jury found the MetaBirkins NFTs to be infringing, the final disposition of this dispute remains pending with the possibility of appeal. Given the importance of the issues at stake, the outcome of this case is bound to be subject to debate regardless of any appeal.

Moreover, while no NFT-specific legal test appears to have emerged from this case and the legal landscape for IP in the Metaverse (and beyond) continues to lack clear guidance, this case has nonetheless provided insight on how courts (and juries) may view the interplay of IP and NFTs. The ultimate outcome of this landmark case is likely to form the basis of the emerging law involving IP rights and NFTs.

© 2023 ArentFox Schiff LLP
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Are You Ready for the Coming Explosion of Cybersquatting?

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The next wave of domain-name barbarians is gathering outside the gates. Here’s what you need to do now to keep your trademarks, and your e-commerce, safe.

Almost every business has had to deal with cybersquatters – pirates that launch web sites designed to divert customers by using domain names that mimic the business’s trademarks.

Until now, the war has focused primarily on domain names within the “.com” sphere. But the battlefront is about to expand – dramatically.

The international body that runs the Internet (called ICANN) has recently begun releasing new generic top-level domains (“gTLDs”). In addition to the familiar “.com,” this program makes it possible to set up a business name, a trademark, a geographic designation – virtually any word in any language – as a gTLD in its own right. Almost 2,000 applications for gTLDs were filed, and more than 1,000 will ultimately be granted. Because many of the new gTLDs will sell domain names to all comers without any attention to whether they are violative of someone else’s trademark rights, they will create a giant new arena in which domain name pirates can operate.

So what should you do now to protect your brands and your domain names?

1. Lock up the family jewels.

ICANN has mandated the creation of a Trade Mark Clearing House, in which owners can list their registered trademarks. It has also required that all newly-released gTLDs offer a 30-day “Sunrise” period in which owners of marks listed in the TMCH get first crack at registering them as domain names. In addition, during the Sunrise period and for sixty days thereafter, other parties that apply for those marks will be advised of the TMCH listing and, if they pursue their application, the owners of the TMCH-listed marks will be notified, giving them an opportunity to invoke various dispute-resolution procedures.

The Trademark Clearance House is now in operation, and it makes sense for brand owners to list at least their “core” trademarks there. These are the marks in which you have invested the most time, energy, and money; the ones most closely associated with your business; the ones you have already had to protect most often in the .com realm.

2. Plan now to make preemptive registrations in gTLDs of particular interest.

An important limitation of the Trade Mark Clearing House is that it protects only against domain names that are identical to your registered trademarks, not to common misspellings, typos, and so on. This leads to a second important step: being prepared to file preemptive domain name registrations for common variations of your brand.

Now is the time to identify specific gTLDs in which you will be especially interested in and to watch for their release dates. For instance, if you’re in the auto industry you will likely want to be active in such gTLDs as “.auto,” “.car,” and the like. As soon as the Sunrise period for one of your identified gTLDs opens, be ready to file immediately. This is an instance where the best defense is a vigorous offense.

Many brand owners were caught unawares years ago when the Internet burst upon the scene, and control of brand-related domain names became crucial. There’s no way to stop the next wave of cyberpiracy. But there’s also no reason not to be prepared for it.

Article by:

John C. Blattner

Of:

Dickinson Wright PLLC