A trademark’s protection can now expand to protect use of one’s trademark in digital worlds in the metaverse and within virtual reality. Hermès, a French luxury brand known for its iconic Birkin handbag, was successful in its litigation against Mason Rothschild, an NFT creator who is responsible for creating a series of 100 digital images entitled MetaBirkins.^[i] A jury awarded Hermes $133,000 after finding Mr. Rothschild infringed on the trademark of Hermès and profited “unlawfully off the goodwill of its sought-after luxury product.”^[ii] Other companies, like Miramax and Nike, have brought similar lawsuits asserting that NFT creators are infringing on the companies’ trademarks and copyrights.

Trademarks & NFTs

A trademark is a form of intellectual property that “can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.”^[iii] A trademark is used to refer to a product that identifies as goods, while a “service mark” is used for services.^[iv] A trademark is utilized to assist customers in recognizing and identifying a product in the marketplace as well as aid customers in differentiating a product from its competitors. Most importantly, a trademark also can “provide legal protection for” a brand and help guard the brand “against counterfeiting and fraud.”^[v]

An NFT, a non-fungible token, is a blockchain-based one of a kind asset that is treated like a piece of art, digital content, or media. Once created, it cannot be reproduced or copied, making each NFT unique to the owner. They can be collected and traded within the virtual marketplace. The possession and ownership of an NFT has no current inherent legal meaning nor legal protection. Unlike trademarks, their legal significance is uncertain.

The trademark and NFT in question

In 1986 Hermès released a luxury leather handbag entitled the Birkin. It has become known as a coveted purse known for its high price tag and exclusivity. One cannot become the owner of a coveted Birkin without first being placed on a wait list, which includes the names of Hollywood royalty and the rich elite.

In 2021, entrepreneur and artist Mason Rothschild created the series of 100 digital images which depicted fur-covered handbags in the same well-known shape and style as the Hermès Birkin. His NFT, entitled MetaBirkins, sought to offer an additional way for an individual to own a version of the Birkin bag. Mr. Rothschild, and his attorneys, conveyed that the NFT “aimed to make a statement about conspicuous consumption.”^[vi] At one point, Mr. Rothschild’s creation sold at prices similar to the luxury handbag, selling for tens of thousands of dollars. Mr. Rothschild claimed the images he created were not meant to be a replica of a Birkin bag, but “rather art that depicts an imaginary bag.”^[vii]

Trademark Infringement & the First Amendment

In January of 2022, Hermès filed suit against Mr. Rothschild, arguing that Mr. Rothschild’s creation diluted the Hermès brand, confused its consumers, and allowed him to unlawfully obtain a profit off the goodwill of the product. Hermès further argued that Mr. Rothschild’s actions could pre-empt Hermès’ ability to offer its own products and services in the virtual marketplace. In its lawsuit, Hermès asked the Court to stop Mr. Rothschild from utilizing their brand, called for the destruction of the created NFTs and his profits, and claimed additional financial damages.

In response, Mr. Rothschild centered his arguments around the legal theory that the NFTs he produced were artwork within the protection of the First Amendment of the Constitution of the United States. Specifically, Mr. Rothschild argued that the existing trademark filed and obtained by Hermès, and its legal rights, did not apply to his series of NFTs because they were constitutionally protected artwork and within his rights related to freedom of speech. While it seems Mr. Rothschild’s argument was supported in part on prior case law that endorses protections for artistic expression, the fact that there was possibly consumer confusion between his NFTs and the Birkin bag itself, his argument was ultimately unsuccessful.

Why is this lawsuit significant? 

This specific lawsuit is among the first to deal with NFTs, how they intersect with the realm of intellectual property, and the free-speech protections associated with art. Litigation regarding trademark infringement does frequently occur concerning various types of products and services but has begun to enter an unknown territory associated with the virtual market. While this type of litigation can sometimes become a lucrative situation for the original trademark holder, it is also an opportunity to establish legal principle and precedent for the area of law in the future. Here, it was an opportunity for clarity on legal rights as virtual reality and the virtual market continue to expand and on what an existing trademark can provide

If you are looking for assistance with a trademark infringement case, the registration of a trademark, or another legal matter regarding intellectual property, and reside in the State of Tennessee, call Cole Law 615-490-6020 to schedule a consultation with one of our Brentwood, Tennessee Intellectual Property Attorneys.

^[i] Hermes Wins Case Against Artist Who Sold NFTs of Brikin Bags, Wall Street Journal (Feb. 8, 2023), available at https://www.wsj.com/articles/hermes-wins-case-against-artist-who-sold-nfts-of-birkin-bags-11675884201.

^[ii] Virtual Birkin Bags on Trial in Hemes Case Testing IP Rights, Wall Street Journal (Jan. 29,2023), available at https://www.wsj.com/articles/virtual-birkin-bags-on-trial-in-hermes-case-testing-ip-rights-11674962955.

^[iii] “What is a trademark?”, United States Patent and Trademark Office, available at https://www.uspto.gov/trademarks/basics/what-trademark.

^[iv] Id.

^[v] Supra note iii.

^[vi] Supra note i.

^[vii] Id.

Any phrase, logo, design, or a combination of these elements, that describes and establishes a good or service is considered a trademark. Two very well-known stars of Hollywood, Hailey Bieber and Kim Kardashian, have recently found themselves involved in trademark infringement lawsuits. On June 15, 2022, Mrs. Hailey Bieber produced and launched a line of skincare products entitled Rhode.^[i] Ms. Kim Kardashian also launched a skincare line in early June.^[ii] Both lawsuits claim the Hollywood stars’ brands are confusing to customers and retail partners due to the names being similar to existing companies.

What is a trademark?

A trademark is a form of intellectual property that “can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.”^[iii] A trademark is used to refer to a product that identifies as goods, while a “service mark” is used for services.^[iv] A trademark is utilized to assist customers in recognizing and identifying a product in the marketplace as well as aid customers in differentiating a product from its competitors. A trademark also can “provide legal protection for” a brand and help guard the brand “against counterfeiting and fraud”.^[v] A trademark awards the owner with the rights to use a word or phrase in reference to specific goods and services, but not the right to the particular word or phrase in general. A trademark is highly successful in providing its various protections when it is creative and unique in reference to the good or service it describes.

How do you establish a trademark?

An individual becomes the owner of a trademark immediately upon use of the trademark with the promotion or sale of the goods or services. The right to one’s trademark is established upon the use of it. However, the rights to use a trademark are somewhat limited if the trademark is not registered with the United States Patent and Trademark Office. If a trademark is not registered with the U.S. Office, the rights of use are limited to the geographic area where an individual is providing their goods and services. If an individual desires stronger trademark rights with a wider range of use, such as nationwide, then the individual must register its trademark with the United States Patent and Trademark Office. A registered trademark provides an individual with broader rights and sufficient legal protection from infringement.

How is a trademark protected?

Once a trademark has been registered with the United States Patent and Trademark Office, and it has been granted by that office, the phrase, design, word or a combination that classifies the good or service becomes legally protected. This legal protection prevents others from registering the same trademark without the owner’s permission and helps prevent an individual from utilizing a trademark that may be very similar and related to the same goods and services as the owner’s trademark. The trademark that has been registered is listed in a public database, which provides notice to the public for any individual searching for a similar trademark.

Without the act of registering the trademark, an individual does not have the right to bring a lawsuit concerning the trademark. The registration of a trademark also provides the owner with a legal presumption that the owner does in fact own the trademark and has the right to use it. This is crucial to the success of a lawsuit brought for trademark infringement and will limit the amount of evidence necessary to present a good case. Several popular brands throughout the United States choose to register their trademarks in order to protect their brand names as a whole.

How long is a registered trademark protected?

As long as an individual continues to use a registered trademark in the marketplace, the registration of the trademark can last indefinitely. Additionally, the owner of the registered trademark is required to file certain documents to demonstrate this continued use with the United States Patent and Trademark Office. If an individual fails to properly maintain a trademark registration, that individual can be subject to loosing the registration entirely and be forced to begin the registration process again.

What happened to Bieber and Kardashian?

On June 21, 2022, co-founders of a fashion company entitled “Rhode” filed suit against Mrs. Bieber in the United States District Court for the Southern District of New York for trademark infringement. The suit claims that the fame and large following of Mrs. Bieber “risks eclipsing the brand that the partners founded in 2014.”^[vi] The suit also highlights that Mrs. Bieber’s use of marketing hashtags on social media are very similar to those used by the fashion company, which may cause confusion among retail partners and customers.

Similarly, Ms. Kardashian was sued on June 28, 2022, by Cydnie Lunsford for trademark infringement over Ms. Kardashian’s skincare line entitled “SKKN”. Ms. Lunsford has engaged in business since 2018 with her skincare brand entitled “SKKN+”. Coincidentally, Ms. Lunsford’s company “Beauty Concepts” filed an application to register a trademark for “SKKN+” just two days before Ms. Kardashian filed several trademark applications to use the term “SKKN By Kim”. Both parties claim that they tried to work together to avoid bringing legal action against one another.

Why are these lawsuits significant? 

These specific lawsuits are not the first time the creators of a skincare brand have been sued for trademark infringement. Litigation regarding trademark infringement does frequently occur concerning various types of products and services and can sometimes become a lucrative situation for the original trademark holder.

If you are looking for assistance with a trademark infringement case, the registration of a trademark, or another legal matter regarding intellectual property, and reside in the State of Tennessee, call Cole Law 615-490-6020 to schedule a consultation with one of our Brentwood, Tennessee Intellectual Property Attorneys.

^[i] “Hailey Bieber Sued for Trademark Infringement Over Skincare Line”, Wall Street Journal (June 21, 2022), available at https://www.wsj.com/articles/hailey-bieber-rhode-lawsuit-11655838774.

^[ii] “Kim Kardashian Is Being Sued Over SKKN”, The Cut (June 29, 2022), available at https://www.thecut.com/2022/06/kim-kardashian-skkn-lawsuit.html.

^[iii] “What is a trademark?”, United States Patent and Trademark Office,  available at https://www.uspto.gov/trademarks/basics/what-trademark.

^[iv] Id.

^[v] Supra note iii.

^[vi] Supra note i.

The exclusive right to copy and distribute a creative work, or a copyright, provides protection to its owner and that person’s original expression of an idea or thought. The film released on May 27, 2022, “Top Gun: Maverick”, has recently found itself involved in a copyright infringement lawsuit. The classic film “Top Gun,” featuring Tom Cruise in the starring role, is based on a magazine article written in 1983. The heirs of the author of the magazine article filed a lawsuit on June 6, 2022, in federal court in Los Angeles, California alleging copyright infringement.^[i] The heirs claim that Paramount Global’s rights to the original magazine story expired in 2022.^[ii]

What is a copyright?

A copyright is a form of intellectual property that secures “original works of authorship” once the creator has created a “tangible form of expression.”^[iii] A copyright is able to protect a wide variety of works, including photographs, musical compositions, books, plays, architectural renderings, and movies.^[iv] Once a creator composes the original work and creates a tangible item from it, that person become the creator and copyright owner. The United States law regarding copyrights awards the creator and copyright owner with exclusive rights to make copies of the work, display the work, and, important to the case at hand, assemble derivative works based upon the original work. The original owner of the copyright also carries the right to allow or authorize other individuals or companies to exercise the exclusive rights they hold. Lastly, the original owner and its heirs have the right to terminate granted rights after thirty-five years.

How is a copyright protected?

A copyright provides varying lengths of protection on original works, dependent on when an original work was authored. Currently, “works created on or after January 1, 1978, have a copyright term of the life of the author plus seventy years after the author’s death.”^[v] If the work has two creators, or is a joint work, the length of protection of the copyright is seventy years following the death of the last surviving creator. Lastly, for original works made anonymously, or under a fake name, the length of protection is ninety-five years from the date of publication or one-hundred and twenty years from creation. The length that is shorter of the two is controlling.

Who can use copyrights?

Every single day individuals use copyrighted material. When people listen to their favorite song, read an award-winning poem, or watch an Oscar winning film, they use copyrights. Therefore, if you are not the original owner of the work, you may still be able to use it. Additionally, one can purchase the licensing, or rights to use, for use of the work. Original works considered in the public domain, such as discoveries, well-known established facts, or works whose term of protection has ceased, are free to be used and do not require any additional licensing or purchasing. Any and all original works created before 1962 are considered part of the public domain.

Can you register a copyright?

Although a copyright comes into existence immediately once an original work becomes tangible or fixed, an owner can register the copyright with the United States Copyright Office. In order to register a copyright with the U.S. Copyright Office, an individual must submit an online application and a copy of the work to be registered that will not be returned. Registering a work as a copyright is required if one is to enforce the exclusive rights associated with the work by filing a lawsuit or other litigation. The registration of a copyright also assists owners of the original works with seeking attorney’s fees and monetary damages if active litigation should occur. Finally, registering a copyright with the U.S. Office of Copyright puts the public on notice of the copyrighted work and its protection.

What happened to Maverick?

The original film entitled “Top Gun” was based off a story in a magazine written by Ehud Yonay entitled “Top Guns.” According to the lawsuit, Paramount Global obtained the exclusive motion picture, or movie rights to the story immediately following its publication.^[vi] The original author’s widow and son filed the lawsuit against Paramount Global for copyright infringement since Paramount’s rights to the magazine story ended in 2020. The defendants in this case assert that the claims made by Mr. Yonay’s widow and son are meritless and false. The lawsuit further states that the Yonay family notified Paramount, and the U.S. Copyright Office, that they were terminating the studio’s rights beginning on January 24, 2020. Paramount Global appears to have ignored that notice and continued production on “Top Gun: Maverick.” Interestingly, Paramount Global did have an exclusive right between the time of the family’s notice in 2018 to the 2020 termination to apply for a new licensure. This new license would reflect how the market value of the original story in the magazine had increased.

Why is this lawsuit significant? 

This specific lawsuit is not the first time the creators of a famous movie have been sued for copyright infringement. Litigation regarding the occurrence of copyright infringement does occur concerning various types of works and can sometimes become a lucrative situation for the original copyright holder. If you, or any family members or friends, are looking for assistance with a copyright infringement case, or other types of intellectual property cases, and reside in the State of Tennessee, call Cole Law at 615-490-6020 to schedule a consultation with one of our Brentwood, Tennessee intellectual property attorneys.

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^[i] ‘Top Gun: Maverick’ Studio Paramount Is Sue Over Copyright, Wall Street Journal (June 6, 2022), available at https://www.wsj.com/articles/top-gun-maverick-studio-paramount-is-sued-over-copyright-11654557910.

^[ii] Id.

^[iii] “What is Copyright”, U.S. Copyright Office, available at https://www.copyright.gov/what-is-copyright/.

^[iv] Id.

^[v] Id.

^[vi] Supra note i.