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MetaBirkins, Trademarks & The First Amendment


Images associated with MetaBirkins NFTs, from Hermès Amended Complaint.

From movie titles to dog toys to NFTs, courts are routinely called on to balance the First Amendment goal of protecting free expression with the competing goal of trademark laws in avoiding consumer confusion. Read on for an update regarding the Supreme Court decision in the Jack Daniels case and how the modified Rogers test was recently applied by a district court in MetaBirkins.


Background: Rogers v Grimaldi


Rogers v. Grimaldi involved a Fellini film entitled “Ginger & Fred” that told the story of two fictionalized cabaret artists who mimicked Fred Astaire and Ginger Rogers and, in the film, became known as Ginger and Fred. In its landmark 1998 decision, the US Court of Appeals for the Second Circuit held that when a trademark was used in an expressive work, it could be prohibited as trademark infringement or false endorsement if it had no “artistic relevance” to the accused work and the use of the mark “explicitly misled as to the source or the content of the work.” Applying that test, the court found the film title had artistic relevance and its use was not explicitly misleading. The Rogers test has been widely adopted.


Update: Jack Daniels v VIP


Almost three decades later, VIP sought to rely on Rogers to defend its parody of Jack Daniel’s trademarks. As explained more fully in our earlier post, the US Court of Appeals for the Ninth Circuit had found the Rogers test for “artistic expression” applied because VIP’s Bad Spaniels dog toys were “expressive works.” This past June, the Supreme Court disagreed, holding that when a trademark is used as a source identifier in an artistic work, Rogers does not afford special protection and the likelihood of confusion standard should be applied. Because VIP used Jack Daniels’ marks to designate the source of its own products, Rogers did not apply. The Court found that the Ninth Circuit’s expansion of Rogers “potentially encompasses just about everything” since names and phrases often contain some expressive message unrelated to source. Accordingly, it vacated the decision and remanded the case.


Applying the Modified Test: MetaBirkins


The Metabirkins case demonstrates the impact of the Supreme Court’s decision in Jack Daniels. A self-described entrepreneur known as Mason Rothschild used modified images of Hermès famous Birkin bag and the Birkin trademark in connection with the sale and marketing of NFTs. A federal district court in New York initially held that the Rogers test applied, at least in part, because Rothschild’s images could constitute a form of artistic expression. However, the court denied Rothchild’s motion to dismiss because there were questions of fact as to whether the use was artistically relevant and whether Hermès had sufficiently alleged the use was explicitly misleading.


The case went to trial and the jury returned a unanimous verdict that Rothschild was liable for three counts of trademark infringement and awarded Hermès $133,000 in damages. Rothschild filed a post-trial motion for judgment as a matter of law or a new trial, providing the district court an opportunity to issue an opinion applying the Supreme Court’s decision in Jack Daniels, which had been decided three weeks earlier. The court denied Rothschild’s motion, noting that he was doing the very thing the Supreme Court found would deprive him of a First Amendment defense: he had used the Hermès marks to designate the source of his goods. The court went further, questioning whether the Rogers test even applies since Rothschild had used MetaBirkins as a mark. Consequently, the court entered a permanent injunction against Rothschild from using the Birkin marks, ordered him to transfer the www.metabirkins.com domain name, and required that Rothschild disgorge any profits he derived from the MetaBirkins NFTs since the beginning of the trial.


Takeaways


Where a defendant uses another’s mark as an indicator of source, courts will have little trouble denying protection under Rogers. Going forward, expect more cases to focus on the question of where to draw the line between whether a use is a source originating trademark use or a form of artistic expression.


If you have questions about or would like to discuss these issues, please feel free to contact us.



Nancy J. Mertzel

Mertzel Law PLLC

1204 Broadway, 4th Floor

New York, NY, 10001

(646) 965-6900

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