Explained: Why Hermès is suing an American digital artist over MetaBirkins NFTs

French luxury fashion brand Hermès is suing American digital artist Mason Rothschild, who created the MetaBirkins series of NFTs (Non-Fungible Tokens), a fast-growing part of the crypto world.

The lawsuit has brought renewed focus to the ongoing debate about NFTs – the uniqueness and true value of these digital artifacts, and the criticisms leveled at them.

Why is Hermès suing Rothschild over MetaBirkins?

Hermès has accused Rothschild of profiting from the company’s “Birkin” brand, a shopping bag the company introduced in the 1980s.

To be clear, Rothschild did not make actual Birkin bags that could be touched. He made digital art inspired by it and titled his artwork “MetaBirkins”, a series of colorful images of tote bags. He then sold this artwork online as an NFT.

According to The National Law Review (NLR), Hermès International and Hermès of Paris have filed suits in the Southern District of New York alleging trademark infringement and trademark dilution. In its complaint, the brand detailed the origins and fame of the Birkin bag. According to NLR, Hermès owns a US trademark for the word Birkin.

Due to the trademark rights owned by the brand, she has claimed infringement in her complaint. It has further stated that it is a case of “unfair competition” based on the artist selling the NFT and promoting his artwork as “MetaBirkins”.

NLR reports that the complaint also mentions a cybersquatting allegation related to metabirkins.com. Cybersquatting refers to the unauthorized practice of registering names similar or identical to those registered as a trademark.

However, Rothschild seems undaunted and has announced on Instagram that he will fight back. In a statement published online, the digital artist said: “I do not create or sell counterfeit Birkin bags. I have created artwork depicting imaginary, fur-covered Birkin bags.”

But why are NFTs considered unique digital assets?

An NFT is a unique, irreplaceable token that can be used to prove ownership of digital assets such as music, artwork, even tweets and memes. The term “non-fungible” simply means that each token is different from a fungible currency like money (a ten rupee note can be exchanged for another and so on).

Cryptocurrencies like Bitcoin and Ethereum are also fungible, meaning one Bitcoin can be exchanged for another. But one NFT cannot be exchanged for another NFT as the two are different and therefore unique. Each token has a different value depending on the asset it represents.

NFT transactions are recorded on blockchains, a digital public ledger, with most NFTs being part of the Ethereum blockchain. NFTs became popular in 2021 when they began to be viewed by artists as a convenient way to monetize their work.

What other reasons are NFTs in high demand?

One of the other attractions is that NFTs are part of a new financial system called Decentralized Finance (DeFi), which eliminates the need for institutions like banks to get involved. For this reason, decentralized finance is seen as a more democratic financial system, as it facilitates laypeople’s access to capital by essentially eliminating the role of banks and other related institutions.

However, since NFTs operate in a decentralized system, any person can sell a digital asset as one. This can sometimes cause problems. For example, if you sell someone else’s artwork as NFT, you could be essentially infringing on copyright. This also happened in the case of the MetaBirkins.

What happened to some recent NFT auctions?

In October last year The economist created an NFT of one of its issue’s covers, showing Alice from “Alice in Wonderland” looking down the rabbit hole, which gives her a glimpse “into this strange new world” where words like cryptocurrencies, Ethereum blockchains, and metaverse come into play mainstream.

In March 2021, Twitter’s ex-CEO Jack Dorsey sold the platform’s first tweet as an NFT. The tweet Dorsey posted in March 2006 read: “Just setup my twttr”. That tweet, which would likely offend grammar pedants, grossed over $2.9 million. This amount would have been credited to Dorsey’s crypto wallet.

What are the criticisms of NFTs?

One of the criticisms of NFTs is that they create value where none exists, as in the case of selling memes and tweets for large sums. Another more common criticism of NFTs is the greenhouse gas emissions associated with conducting these transactions given the amount of electricity they use.

According to the Cambridge Bitcoin Electricity Consumption Index, the amount of electricity consumed by the Bitcoin network in a single year could supply the entire electricity needs of the University of Cambridge for 993 years, or power all the tea kettles used to boil water in the UK for 30 years.

The Valuables by Cent website, through which Dorsey auctioned his tweet as an NFT, allows anyone to bid on any tweet. Buying a tweet means that the person receives a digital certificate – signed and verified by the tweeter – that proves they own the tweet.

Once a person buys a tweet, they can resell the tweet on the website or display it in their online gallery. Buyers can also keep the tweet in their private collection.

But why would anyone buy a tweet in the first place? The site lists this question in its FAQs and offers the following answer: “Every day, valuable moments happen within the span of a tweet. By converting those moments into NFTs, that value is captured in the form of digital collectibles. Buying an NFT from someone creates the beginning of a direct relationship between you and them. That’s pretty awesome.”


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