Opinion · District Court, S.D. New York
HERMES INTERNATIONAL and HERMES OF PARIS, INC. v. "MASON ROTHSCHILD" a/k/a SONNY ESTIVAL
HERMES Int’l & HERMES OF PARIS, INC. v. "MASON ROTHSCHILD" a/k/a SONNY ESTIVAL, No. 1:22-cv-00384, UP10348379 (District Court, S.D. New York Feb. 2, 2023)
- Type
- Opinion
- Court
- District Court, S.D. New York
- Jurisdiction
- New York
- Date
- 2023-02-02
- Topic
- general
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK HERMÈS INTERNATIONAL and HERMÈS OF PARIS, INC., 22-cv-384 (JSR) Plaintiffs, OPINION AND ORDER -against- MASON ROTHSCHILD, Defendant. JED S. RAKOFF, U.S.D.J.: By Order dated December 30, 2022, the Court denied the parties’ cross motions for summary judgment, with Opinion to follow. Here is that Opinion. In their cross-motions for summary judgment, plaintiffs Hermès International and Hermès of Paris, Inc.
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
HERMÈS INTERNATIONAL and
HERMÈS OF PARIS, INC.,
22-cv-384 (JSR)
Plaintiffs,
OPINION AND ORDER
-against-
MASON ROTHSCHILD,
Defendant.
JED S. RAKOFF, U.S.D.J.:
By Order dated December 30, 2022, the Court denied the
parties’ cross motions for summary judgment, with Opinion to
follow. Here is that Opinion.
In their cross-motions for summary judgment, plaintiffs
Hermès International and Hermès of Paris, Inc. (collectively
“Hermès”) and defendant Mason Rothschild ask the Court to determine
two questions. First, whether the digital images underlying the
non-fungible tokens (“NFTs”) produced and sold by defendant Mason
Rothschild depicting fur-covered Birkin handbags -- so-called
“MetaBirkins” -- should be evaluated under the Rogers v. Grimaldi
test for artistic works or the Gruner + Jahr test for general
trademark infringement. Second, whether, under whichever test is
applied, the MetaBirkins NFT images or related products infringe
and/or dilute Hermès’ trademarks pertaining to its Birkin handbag.1
As to the first, threshold question, the Court reaffirms the
determination it made in its earlier Order of May 18, 2022 that
the plaintiffs’ claims should be assessed under the two-part test
articulated in Rogers v. Grimaldi, 875 F.2d 994
(2d Cir. 1989),
for evaluating trademark infringement in artistic works. Dkt. 77,
Order Denying Mot. to Dismiss (“Mot. Dismiss Order”) at 11. As to
the second question, the Court finds that there remain genuine
issues of material fact that preclude summary judgment.
I. Factual Background2
Hermès is a luxury fashion brand known, among other things,
for designing, producing, and marketing the “iconic” Birkin. Dkt.
74, Plfs.’ Statement of Material Facts (“Plfs. SOMF”) ¶ 2. Since
1986, Hermès has sold over $1 billion worth of these handbags in
the United States, including over $100 million dollars’ worth in
the past ten years alone. Dkt. 69, Declaration of Nicolas Martin
(“Martin Decl.”) ¶ 10. Individual Birkin bags regularly sell for
1 The plaintiffs own trademark rights in the “Birkin”
mark -- that is, the name of the bag itself -- and trade dress
rights in the design of the Birkin handbag. Am. Compl. ¶¶ 34–36.
Plaintiffs also bring cyber-squatting and unfair competition
claims. See generally id.
2 The following facts are taken from the parties’ Rule 56.1
statements and supporting materials. Throughout this Opinion, the
Court construes the facts in dispute most favorably to the party
not moving for summary judgment with respect to whichever motion
the Court is analyzing.
tens of thousands of dollars, with one fetching hundreds of
thousands of dollars at Christie’s, an art auction house. Plfs.’
SOMF ¶ 58. As both parties recognize, the Birkin bag has also come
to occupy a place of cultural importance as a symbol of wealth and
exclusivity. Cf. Dkt. 84, Def’s Counterstatement to Plfs. SOMF ¶
3.
Defendant Mason Rothschild3 is a self-described
“marketing strategist” and “[e]ntrepreneur” who has launched two
Birkin-related projects.4 Dkt. 24, Amended Complaint (“Am. Compl.”)
3 The defendant’s legal name is Sonny Estival but he is
referred to in this Opinion by his assumed name of Mason
Rothschild, as he is in both parties’ briefing papers. Am. Compl.
¶¶ 1, 8–9.
4 There is substantial disagreement between the parties as to
whether Rothschild himself created the digital images associated
with the MetaBirkins project or whether another artist -- Mark
Berden -- was responsible for designing and rendering them. On the
one hand, Rothschild argues that he should be considered the NFT’s
progenitor: “[h]e had final approval” of all the digital images
and, though “Mr. Berden functioned as a high-level studio
assistant” who helped Rothschild create the digital images, Berden
ultimately worked “at Rothschild’s direction.” Defendant’s
Counter-Statement to Plaintiff’s Rule 56.1 Statement of Undisputed
Facts (“Def. Counter-Statement to Plfs. SOMF”) ¶ 35. The
plaintiffs, on the other hand, submit that, to the extent the
MetaBirkins are an artistic creation at all, Mr. Berden should be
considered the artist. See Plfs. Br. in Support of Summary Judgment
(“Plfs. Br. in Support”) at 7. They allege that “Berden generated
every image associated with the MetaBirkin NFTs” though
“Rothschild did not provide Berden” with the requisite software,
pay him a salary, or otherwise manage his hours. Id.
This dispute,
however, strikes the Court as legally irrelevant so far as the
instant motions are concerned. Whether there is admissible
evidence that the MetaBirkins are art -- and therefore, whether
the Rogers test should apply -- does not turn on who designed the
NFTs.
¶¶ 1, 8–9. First, in or around May 2021, Rothschild created a
digital image he entitled “Baby Birkin,” which depicted a 40-week-
old fetus gestating inside a transparent Birkin handbag. Dkt. 72,
Decl. of Megan Corrigan (“Corrigan Decl.”) ¶¶ 70–71. Rothschild
later sold the NFT linked to the “Baby Birkin” image for $23,500;
it recently resold for $47,000. Id. ¶ 72. Then, a few months later,
in December 2021, Rothschild created a collection of digital images
titled “MetaBirkins,” each of which depicted a unique image of a
blurry faux-fur-covered Birkin handbag. Am. Compl. ¶¶ 37, 76, 79,
Fig. 5 and Ex. Z. It is this “MetaBirkins” project that is the
subject of this litigation.
As with his earlier “Baby Birkin” project, Rothschild used
NFTs to sell the digital images to individual buyers. NFTs are
digital records of ownership, typically recorded on a publicly
accessible ledger known as a “blockchain.” See Mot. Dismiss Order
at 2. On the blockchain, an NFT functions as a sort of “digital
deed” representing ownership in a physical or digital asset or
assets. Here, each of the NFTs signified sole ownership of a
particular “MetaBirkin,” that is, a unique digital image of a
Birkin handbag rendered by Rothschild.
Rothschild also commissioned computer engineers to
operationalize a “smart contract” for each of the NFTs. A “smart
contract” refers to a computer code that is also stored on the
blockchain and that, among other things, determines the name of
each of the NFTs, constrains how they can be sold or transferred,
and controls which digital files are associated with each of the
NFTs. See Dkt. 78, Decl. of Kevin D. Mentzer (“Mentzer Decl.”),
Ex. 1 at 9, 10, 16, 21 n.9, 24, 29.
Importantly, the “smart contract” is distinct from the NFT
with which it is associated: the contract and the NFT can therefore
be owned by two unrelated people or entities. Id. Indeed,
Rothschild held onto the “smart contract” for each of the
“MetaBirkin” NFTs even after the NFTs themselves had been sold to
other buyers, which means he retains the power to change the image,
title, or other attributes associated with the NFTs. See id. at
11, 16-17 & 29.
On December 2, 2021, Rothschild sold the rights to purchase
the “MetaBirkin” NFTs before they were formally generated and
placed on the blockchain -- or “minted” -- to one hundred
purchasers through his website, https://metabirkins.com. Id., Ex.
1 at 9. Customers who browsed the website before the NFTs were
sold and minted would see that each NFT was associated with a
particular “MetaBirkins” digital image. Id. However, at the time
the minting rights were sold, but before the “MetaBirkins” NFTs
were formally minted and placed on the blockchain, a buyer viewing
his purchase details on the MetaBirkins website would see that his
NFT was now linked to a digital image of an object shrouded by a
white cloth, not a unique “MetaBirkins” bag. Corrigan Decl., Ex.
21 at 227:16-228-3. Once the NFTs were minted on December 3,
Rothschild -- using the “smart contract” -- replaced the “shrouded”
object image with a unique “MetaBirkin” bag associated with the
NFT, which continued to serve as the digital asset linked to each
NFT for the duration of the period covered by this case. Id.
Around the same time, Rothschild contemplated “minting” more
MetaBirkins NFTs to sell. Corrigan Decl., Ex. 29. In conversations
with his associate, Mark Berden, he remarked that “[MetaBirkin
NFTs] might be the next blue chip” and that they should consider
producing another one hundred NFTs. Id. Later, he revised this
figure upward to nine hundred, adding that the profits of these
newly minted NFTs should be divided between the two, with $400,000
going to Rothschild and $100,000 to Berden. Id. Insisting that he
was “sitting on a gold mine” and referring to himself as “a
marketing king,” Rothschild also discussed with his associates
potential future digital projects centered on luxury products,
such as watch NFTs called “MetaPateks” that would be modeled after
the famous watches produced by Patek Philippe. Id., Ex. 33. In
total, Rothschild and his associates produced one hundred
MetaBirkins, which have, through June 2022, sold for over $1.1
million. Am. Compl. ¶ 120. On top of receiving a cut of those
proceeds, Rothschild also received a creator fee for every re-sale
of a MetaBirkin NFT, amounting to 7.5% of the total price of sale.
Mentzler Decl., Ex. 1 at 5, 8-9.
In addition to the claims for infringement and dilution of
its marks, Hermès asserts that Rothschild’s project has disrupted
their efforts to enter the NFT market and hindered its ability to
profit in that space from the Birkin bag’s well-known reputation.
See Plfs. SOMF ¶¶ 109-112. Indeed, the company alleges that it has
for years developed potential uses for NFTs as part of its overall
business strategy. Rothschild’s efforts to crowd it out of the NFT
market, Hermès claims, places it at a competitive disadvantage:
its plans to enter this market follow on the efforts of several
top fashion brands -- including Gucci, Louis Vuitton, and
Balenciaga -- to develop NFT strategies that would allow them to
market their goods to a wider audience. Id. ¶ 113.
II. Procedural Background
Hermès brought this trademark action against Rothschild on
January 14, 2022, shortly after notifying the defendant of their
allegations in a December 16, 2021 cease and desist letter. See
Dkt. 1, Complaint. Plaintiffs press four sets of allegations in
their Amended Complaint. First, they claim that the MetaBirkins
NFTs infringe Hermès’ trademarks in the word “Birkin” and in the
design and iconography of the handbag.5 Second, they claim that
5 Although Hermès maintains that Rothschild’s
misappropriation of the Birkin bag’s “trade dress and imagery” are
“aggravating factors” in this litigation, they assert that “it was
Rothschild’s unauthorized use of the Birkin name for [his] NFTs
that . . . gave rise to this action” and is thus the focus of the
parties’ briefing. See Plfs. Br. in Support at 3.
Rothschild’s alleged appropriation of the “Birkin” mark diluted
and damaged the distinctive quality and goodwill associated with
the mark. Third, they claim that Rothschild’s use of a website
domain name -- https://metabirkins.com -- constituted
cybersquatting, in that it was confusingly similar to the “Birkin”
mark, and therefore “harmed . . . and dilute[d]” the mark’s
distinctiveness and the goodwill associated with it. And fourth,
they claim that Rothschild’s use of its trademarks constitutes
unfair competition under both federal and state law.
III. Discussion
A. Hermès’ Trademark Infringement Claims
At the outset, the Court must decide which of the two
frameworks for assessing trademark infringement applies to the
claims in this case: the “Rogers” test or the “Gruner + Jahr” test.
Courts in this circuit and elsewhere6 have long applied a two-
tiered approach to trademark infringement claims. Alleged
trademark infringement in works of “artistic expression” are to be
evaluated under the speech-protective test set forth in Rogers v.
Grimaldi, 875 F.2d 994, 1000
(2d. Cir. 1989). Claimed infringement
6 The Third, Fifth, Sixth, Ninth, and Eleventh Circuits have
largely adopted the Rogers test. See e.g., Seale v. Gramercy
Pictures, 949 F. Supp. 331
(E.D. Pa. 1996), aff’d without opinion,156 F.3d 1225
(3d Cir. 1998); Westchester Media v. PRL USA Holdings, Inc.,214 F.3d 658
(5th Cir. 2000; ETW Corp. v. Jireh Publ’g,332 F.3d 915, 937
(6th Cir. 2003); Gordon v. Drape Creative, Inc.,909 F.3d 257, 269-70
(9th Cir. 2018). in all other works -- that is, those that are instead “primarily intended to serve a commercial purpose” -- are subject to the Gruner + Jahr test, which largely involves assessing whether a defendant’s use of something akin to plaintiff’s trademark confused customers as to the source of the work or product. See Gruner + Jahr USA Pub., a Div. of Gruner + Jahr Printing & Pub. Co. v. Meredith Corp.,991 F.2d 1072
(2d Cir. 1993).7
The plaintiff contends that, because “Rothschild had no
discernable artistic intent or expression in promoting and selling
[the MetaBirkins NFTs],” it is the test outlined in Gruner + Jahr
for evaluating alleged trademark infringement in general that
should apply. See 991 F.2d 1072, 1074
(2d Cir. 1993); Dkt. 77,
Plf. Br. Mot. Summ. J. at 23. The defendant, by contrast, urges
the Court to affirm its previous ruling (made, however, just on
the pleadings) that the Rogers test for creative works applies
because the digital images associated with the MetaBirkins NFTs
“could constitute a form of artistic expression.” Mot. Dismiss
7 The Second Circuit fashioned the Rogers test with the
understanding that trademark law has the potential to “intrude on
First Amendment values” by discouraging the use of certain
trademarks in expressive works.” AM General LLC v. Activision
Blizzard, Inc., 450 F. Supp. 3d 467
, 477 (S.D.N.Y. 2020). The test ensures, among other things, that “a markholder cannot shield itself from criticism by forbidding the use of its name in commentaries critical of its conduct.” Lamparello v. Falwell,420 F.3d 309, 318
(4th Cir. 2005).
Order at 11. This Court agrees with the defendant: it is the Rogers
test that still applies here on summary judgment.
1. What Works Are “Artistic” and Therefore
Deserving of First Amendment Protection Under
the Rogers Test?
Deciding which of these tests to apply on summary judgment
first requires defining the set of works that are “artistic” and
therefore deserving of First Amendment protection. See Rogers, 875 F.2d at 1000
. Rogers itself had no occasion to elaborate on which works qualified as “artistic” because the work at issue there -- a Federico Fellini film parodying Fred Astaire and Ginger Rogers -- was “indisputably” one of “artistic expression” and therefore presumptively “deserv[ing of] protection.”Id. at 997
; see also Rogers v. Grimaldi,695 F. Supp. 112, 120-121
(S.D.N.Y. 1988) (juxtaposing “artistic expression” with “commercial speech . . . intended primarily to persuade the public to consume something . . . or to convey the false impression that [a] plaintiff was somehow involved with or had endorsed the product.”). Later cases in the Second Circuit have done little to further define “artistic expression.” See, e.g., Cliff Notes, Inc. v. Bantam Doubleday Dell Pub. Group, Inc.,886 F.2d 490, 495
(2d Cir. 1989) (stating that “the Rogers balancing approach is generally applicable to Lanham Act claims against works of artistic expression,” a category which includes “parody”); United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc.,128 F.3d 86
, 93 (2d
Cir. 1997) (explaining that the First Amendment protects the use
of trademarks to further “commentary, comedy, parody, news
reporting, or criticism,” among other things).
Decisions from our fellow district courts are somewhat more
helpful in shedding light on what constitutes “artistic
expression.” Most of these courts have held that the Rogers test
applies wherever the work is plainly expressive and the plaintiff’s
trademark is “not [used as] a source identifier.” See, e.g.,
Champion v. Moda Operandi, Inc., 561 F. Supp. 3d 419
, 434 (S.D.N.Y. 2021) (quoting Yankee Pub. Inc. v. News Am. Pub. Inc.,809 F. Supp. 267, 276
(S.D.N.Y. 1992) (Leval, J.)) (noting that this represents
“an expan[sion] of the Rogers test).
The gist of these holdings is that as long as the plaintiff’s
trademark is used to further plausibly expressive purposes, and
not to mislead consumers about the origin of a product or suggest
that the plaintiff endorsed or is affiliated with it, the First
Amendment protects that use. See Yankee Pub. Inc., 809 F. Supp. at 276
. Put another way, “[t]he First Amendment” in the trademark context “protects an individual’s right to speak out against a mark holder, but it does not permit an individual to suggest that the mark holder is the one speaking.” SMJ Grp., Inc. v. 417 Lafayette Restaurant LLC,439 F. Supp. 2d 281, 291
(S.D.N.Y. 2006).
The touchstone of the inquiry, then, is whether the trademark
was used to mislead the public about the origin of the product or
the parties that endorse or are affiliated with it. To understand
why, it helps to examine the purposes underlying trademark law and
how those goals inform the scope of its protection. Trademark law
is concerned with preventing consumer confusion and making it
easier for consumers to make informed decisions about products on
the market. See Elastic Wonder, Inc. v. Posey, 179 F. Supp. 3d 307, 316
(S.D.N.Y. 2016). More specifically, the reason that trademark law protects a mark holder’s rights in certain “symbols, elements, or devices used to identify a product in the marketplace” is so that consumers can reliably determine the producer -- or origin -- of a particular good. See EMI Catalogue P’ship v. Hill, Holliday, Connors, Cosmopulos, Inc.,228 F.3d 56
(2d. Cir. 2000). This information is vital to ensuring that consumers can make informed purchases: it “makes consumers confident that they can identify brands they prefer,” made by the manufacturers they prefer, “and can purchase those brands without being confused or misled” about the qualities of the goods they are purchasing. Two Pesos, Inc. v. Taco Cabana, Inc.,505 U.S. 763
, 784 n.19 (1992)
(Stevens, J., concurring).
Unlike copyright law (which implements Art. I, § 8, cl. 8 of
the Constitution), trademark law is not intended to protect the
owner’s right in a creative product simply to encourage creative
output, i.e., where there is no consumer confusion. See EMI
Catalogue, 228 F.3d 56, 63
(2d Cir. 2000). In other words,
trademark law, unlike copyright law, is not founded on a
constitutional mandate, and therefore must be applied with caution
where constitutionally protected speech is arguably involved.
2. The Rogers Test Governs This Case
Applying these principles, this Court determined in its Order
denying the defendant’s motion to dismiss that the Rogers test
applies to Hermès’ claims because, on the pleadings, Rothschild’s
MetaBirkins “could constitute a form of artistic expression.” Mot.
Dismiss Order at 11. Having now carefully examined the admissible
evidence adduced on the instant summary judgment motions, the Court
reaches the same conclusion as to the applicable test. This is
because defendant has identified admissible evidence supporting
its assertion that Rothschild’s use of Hermès’ marks did not
function primarily as a source identifier that would mislead
consumers into thinking that Hermès originated or otherwise
endorsed the MetaBirkins collection, but rather as part of an
artistically expressive project. See Champion, 561 F. Supp. 3d at
434.
Before proceeding, some clarity is needed on exactly what
works are at issue. “Because the digital images are not permanent
and can be easily replaced” through use of a smart contract, the
plaintiff believes that the title “MetaBirkins” refers to the NFTs
“separate and apart from the digital images” of faux-fur bags with
which they are associated. See Plfs. Br. in Support at 9. Indeed,
it is undisputed that the image associated with each of the NFTs
before they were minted was a white shrouded object until
Rothschild replaced that image with faux-fur Birkin bags through
use of the NFTs’ smart contracts. To this, Rothschild responds
that the term “MetaBirkins” includes the digital images themselves
because the descriptions that preceded the sales of the NFTs made
clear to consumers that they were purchasing a digital handbag
image and not just a digital deed divorced from that image.
Given the centrality of consumer confusion to trademark law
generally, it is best to view this issue from the perspective of
the prospective consumer. Individuals do not purchase NFTs to own
a “digital deed” divorced from any other asset: they buy them
precisely so that they can exclusively own the content associated
with the NFT.
What is more, undisputed evidence in the record indicates
that consumers did in fact understand themselves to be purchasing
exclusive ownership of the digital image alongside the NFT. A
screenshot of the MetaBirkins website before minting shows that
prospective buyers would have been shopping for an NFT associated
with the digital image of a Birkin bag, not a white shrouded
object. See, e.g., Rothschild Decl ¶ 11. To be sure, since
Rothschild held onto the smart contract, he had the technical
ability to change the digital image associated with the NFT,
essentially at will. But the fact that Rothschild could do so in
the abstract is irrelevant to the undisputed facts of this case:
that, for all but a day, the MetaBirkins NFTs were linked to an
image of a unique digital handbag and that consumers understood
themselves to be buying a deed to that handbag.
Thus, the title “MetaBirkins” should be understood to refer
to both the NFT and the digital image with which it is associated.
Indeed, a reasonable inference from the admissible evidence
presented on these motions is that the relevant consumers did not
distinguish the NFTs offered by Mr. Rothschild from the underlying
MetaBirkins images associated with the NFTs and, instead, tended
to use the term “MetaBirkins NFTs” to refer to both. See e.g.,
Dkt. 64, Decl. of Mason Rothschild (“Rothschild Decl.”) ¶ 11.
“When resolving the somewhat competing protections of the
Lanham Act and the First Amendment, courts have distinguished
between uses of a mark ‘for an expressive purpose’ . . . and uses
of a mark to identify the source of a message.” SMJ Group, 439 F. Supp. 2d at 291
. Because the admissible evidence introduced on the
instant motions indicates that both kinds of uses were present,
the Rogers test remains the applicable one as far as these motions
are concerned. See Mot. Dismiss Order at 11.
Indeed, the MetaBirkins images themselves, with their
depiction of Birkin bags covered with fur, suggest that they were
originated as a form of artistic expression. While there may have
been some confusion in this respect, as plaintiffs argue, it should
also be noted that, after Hermès sent to Rothschild a cease and
desist letter outlining its allegations, Rothschild placed a
prominent disclaimer on the MetaBirkins website stating that his
project was “not affiliated, associated, authorized, endorsed by,
or in any way officially connected with Hermès, or any of its
subsidiaries or affiliates.” Id. ¶ 25. Further, when several
publications mistakenly reported an affiliation between Hermès and
the MetaBirkins project,8 the defendant’s publicist, Kenneth Loo,
reached out and asked that these publications issue corrections
regarding the mistaken affiliation. Id. ¶¶ 122, 126-128. And though
Rothschild sought to partner with Hermès on the project, after his
attempts failed to bear fruit he did not represent to others that
Hermès had agreed to work with him. Id.
Further still, evidence contemporaneous with the launch of
the project suggests that Rothschild viewed the project as a
vehicle to comment on the Birkin bag’s influence on modern society.
For instance, in an interview with Yahoo Finance dated December 6,
2021 -- ten days before Hermès sent its cease and desist letter to
Rothschild outlining its allegations -- Rothschild characterized
8 Elle UK published an article in which they reported that
“Hermes had created the MetaBirkins NFT and referred to the
MetaBirkins as a Birkin.” See Plfs. SOMF ¶ 123. L’Officiel, a
French fashion magazine, wrote that Hermes “partnered with”
Rothschild to create “a new line of Birkin bags,” and “another
collection of Birkin NFTs.” Corrigan Decl., Ex. 67 at 121; Ex 72.
The New York Post stated that Hermes had “unveiled the MetaBirkin
-- a VR version of its signature bag.” Plfs. SOMF ¶ 128.
the NFT collection as “an experiment to see if [he] could create
that same kind of illusion that [the Birkin bag] has in real life
as a digital commodity.”9 Plfs. SOMF ¶ 168. The decision to make
them faux-fur covered, he also explained, was an attempt to
introduce “a little bit of irony” to the efforts of some fashion
companies to “go fur-free.” Id.
To be sure, Hermès has offered admissible evidence
contradicting each of defendant’s assertions and the evidence
referenced above. For example, there is evidence introduced by
plaintiffs from which a reasonable juror could conclude that
Rothschild’s claims that he viewed MetaBirkins as a largely
artistic endeavor is a fabrication. For example, in discussions
with investors, Rothschild observed that “he doesn’t think people
realize how much you can get away with in art by saying ‘in the
style of’” and boasted that he was “in the rare position to bully
a multi-billion dollar corp[oration].” Plfs. SOMF ¶¶ 176, 178.
Similarly, in one text message, Rothschild told associates that he
wanted to make “big money” by “capital[izing] on the hype” in the
media generated for the collection. Def. SOMF ¶ 200. And in another
text message, Rothschild encouraged Mr. Berden to generate the
9 In the same interview, Rothschild also elaborated on the
communicative message behind his earlier “Baby Birkin” project,
explaining that the decision “to put a baby in a Birkin and go
through all stages of pregnancy” was an “artistic representation”
that “play[ed] on the words baby and Birkin,” which is “the most
sought after Birkin size.” Plfs. SOMF ¶ 168.
MetaBirkins NFTs “real fast” so that they could “print some money”
from their sale, reassuring Berden that the “simple” digital images
could later be “swapped out” for “better ones.” Id. ¶ 218.
However, such evidence does little more than show that
Rothschild’s project was driven in part by pecuniary motives, a
fact that does not bar application of the Rogers test. Whereas as
a general matter “speech . . . primarily intended to serve a
commercial purpose” falls outside the scope of the First Amendment,
Rogers v. Grimaldi, 695 F. Supp. 112, 120-121
(S.D.N.Y. 1988), a
court may not strip an artistic work of First Amendment protection
merely because the artist seeks to market and sell his creative
output. See Mot. Dismiss Order at 12 (“Rogers is not inapplicable
simply because Rothschild sells the images -- the movie studio
defendant in Rogers sold the film at issue.”). Put another way,
courts should not expect that the First Amendment applies only to
the works of “starving artists” whose sole mission is to share
their artistic vision with the world. Overall, the very fact that
there is a genuine dispute of fact as to virtually every aspect of
plaintiffs’ claims only goes to show why summary judgment is not
appropriate here, but not why the Rogers balancing test is not the
right test against which to evaluate the parties’ competing
inferences.
3. The Parties’ Motions for Summary Judgment As To
the Rogers Factors Are Denied
While the Rogers test is therefore the governing framework
for these motions, the Rogers test does not offer defendants
unfettered license to infringe another’s trademarks. See Rogers,
875 F.2d at 998
(“First Amendment concerns do not insulate titles of artistic works from all Lanham Act claims.”). “Works of artistic expression . . . deserve protection,” but they “are also sold in the commercial marketplace like other more utilitarian products, making the danger of consumer deception a legitimate concern that warrants some government regulation.”Id.
In certain instances,
the public’s interest in avoiding competitive exploitation or
consumer confusion as to the source of a good outweighs whatever
First Amendment concerns may be at stake.
The Rogers test incorporates these competing considerations.
Specifically, an otherwise artistic work is not entitled to First
Amendment protection under that test if the plaintiff can show
that either (1) the use of its trademark in an expressive work was
not “artistically relevant” to the underlying work or (2) the
trademark is used to “explicitly mislead” the public as to the
source or content of the underlying work. Id.
To determine whether either party is entitled to summary
judgment under the Rogers test, then, the Court must inquire
whether there remains a “genuine issue as to any . . . fact”
material to meeting either of the prongs of the test. Because the
Court concludes that genuine issues of material fact exist with
respect to both these elements, it denies both parties’ summary
judgment motions in their entirety.
i. The “Artistic Relevance” Factor
The artistic relevance prong of the Rogers test “ensures that
the defendant intended an artistic -- i.e., non-commercial
association with the plaintiff’s mark, as opposed to one in which
the defendant intends to associate with the mark to exploit the
mark’s popularity and good will.” Louis Vuitton Malletier S.A. v.
Warner Bros. Ent. Inc., 868 F. Supp. 2d 172, 178
(S.D.N.Y. 2012). Under Rogers, however, a showing of artistic relevance is easily satisfied: it is met “unless the [use of the mark] has no artistic relevance to the underlying work whatsoever,” and was instead chosen merely “to exploit the publicity value of [the plaintiff’s mark or brand].” Rogers,875 F.2d at 1001
(emphasis in original).
Still, “the level of relevance” is not “zero.” E.S.S. Ent.
2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1100
(9th Cir. 2008); see Rogers,875 F.2d at 1001
(cautioning that the artistic relevance prong is not met where the relevant trademark was “chosen just to exploit the publicity value of [the plaintiffs’] mark”). In such a case, the defendant invokes the First Amendment as pretext for his real objective -- to unfairly profit from the “popularity and goodwill” that the plaintiff had worked hard to cultivate. Louis Vuitton Malletier S.A. v. Warner Bros. Ent. Inc.,868 F. Supp. 2d 172, 178
(S.D.N.Y. 2012).
Here, there is a genuine factual dispute as to whether
Rothschild’s decision to center his work around the Birkin bag
stemmed from genuine artistic expression or, rather, from an
unlawful intent to cash in on a highly exclusive and uniquely
valuable brand name.
Hermès argues that Rothschild invoked the First Amendment as
a defense only after it had sent a cease and desist letter on
December 16, 2021. In their view, Rothschild’s comments to
investors that “he doesn’t think people realize how much you can
get away with in art by saying ‘in the style of’” and that he was
“in the rare position to bully a multi-billion dollar
corp[oration]” are probative of an intent to exploit. See Plfs.
SOMF ¶¶ 176, 178.
Rothschild, by contrast, maintains that the project’s
expressive purpose was clear from its inception. See Def. SOMF ¶17
(citing to testimony by Rothschild that the MetaBirkins NFT was
“part of his artistic experiment to see how people with money and
influence who drive the culture would respond to” the MetaBirkins
and “whether they actually would ascribe value to the ephemeral
MetaBirkins” in the same way they attached value to the physical
Birkin bags”). Because the facts in dispute on this issue are both
material and genuine -- such that their resolution one way or the
other could be relevant to the outcome of the litigation -- summary
judgment for either party is inappropriate here.
More generally, whether a defendant’s use of a plaintiff’s
trademark is “artistically relevant” to their work is “a mixed
question of law and fact” involving “the application of [the Rogers
test] to a particular set of facts.” Richardson v. New York State
Dep't Corr. Serv., 180 F.3d 426, 437
(2d Cir. 1999) (citations and internal quotations omitted). “Such mixed questions are especially well-suited for jury determination and summary judgment may be granted only when reasonable minds could not differ on the issue.”Id.
Because reasonable individuals could reach different
conclusions on the “artistic relevance” factor, the Court denies
both parties’ summary judgment motions on it.
ii. The “Explicitly Misleading” Factor
Even where the use of a trademark bears “some artistic
relevance” to an underlying artistic work, the First Amendment
does not protect such use if it “explicitly misleads as to the
source or the content of the work.” Twin Peaks Prods., Inc. v.
Publications Int’l, Ltd., 996 F.2d 1366
, 1379 (2d Cir. 1993). A
work is “explicitly misleading” if it “induces members of the
public to believe” that it was created or otherwise authorized by
the plaintiff. Id. “This determination must be made, in the first
instance, by application of the venerable Polaroid factors,” with
the important qualification that the “likelihood of confusion”
assessed under these factors “must be particularly compelling to
outweigh the First Amendment interest recognized in Rogers.” Id.
Put another way, the most important difference between the Rogers
consumer confusion inquiry and the classic consumer confusion test
is that consumer confusion under Rogers must be clear and
unambiguous to override the weighty First Amendment interests at
stake. Id.
The Second Circuit’s decision in Polaroid Corp v. Polaroid
Elecs. Corp, 287 F.2d 492
(2d Cir. 1961), set forth eight factors
that courts (and juries) should weigh to assess whether the
defendant’s use of a plaintiff’s trademark is explicitly
misleading. Applied here, the relevant considerations are: (1) the
strength of Hermès’ mark, with a stronger mark being entitled to
more protection; (2) the similarity between Hermès’ “Birkin” mark
and the “MetaBirkins” mark; (3) whether the public exhibited actual
confusion about Hermès’ affiliation with Rothschild’s MetaBirkins
collection; (4) the likelihood that Hermès will “bridge the gap”
by moving into the NFT space; (5) the competitive proximity of the
products in the marketplace; (6) whether Rothschild exhibited bad
faith in using Hermès’ mark; (7) the respective quality of the
MetaBirkin and Birkin marks; and, finally, (8) the sophistication
of the relevant consumers.
As the sheer length of this list should communicate, “the
Polaroid factors require a fact-intensive, context-specific
analysis presented on a full record.” Uber Inc. v. Uber Techs.,
Inc., 521 F. Supp. 3d 455
(S.D.N.Y. 2021). One may expect, then,
that in most cases involving Rogers there would remain genuine
issues of material fact with respect to many or most of its
factors, even at the late stages of litigation.
That is the case here. To take just one factor, the parties
disagree vehemently over whether consumers were confused about
Hermès’ association with the MetaBirkins project. Indeed, Hermès
commissioned a study that found a 18.7% net confusion rate among
potential consumers of NFTs. Alongside this aggregate data, the
plaintiff points to anecdotal evidence of social media users and
the media that allegedly shows actual confusion over the fashion
company’s role in the project.10 Rothschild, for his part, objects
to the study’s method and argues that the social media posts are
not evidence of actual confusion. Because there remain substantial
factual disagreements between the parties with respect to many --
if not most -- of the eight factors, any of which could be
dispositive to the outcome, the Court declines to grant summary
judgment for either party on this issue.
10 For example, one user on Twitter commented “Finally an NFT
my wife can get on board with! Would LOVE to get her this Birken
[sic] for Christmas!” Plfs. SOMF ¶ 132. Another that: “I need this
Birkin for the wifey! Please whitelist me sir. #WAGMI
#MetaBirkins.” Id. ¶ 133. A third that: “Birkin NFT is the future
of fashion.” Id. ¶ 134. One begged Rothschild to “whitelist him"
so that he could “own his first Birkin.” Id. ¶ 146. Though
consumers may have been confused about Hermes’s association,
merely using the shorthand “Birkin” to refer to the NFTs is
consistent with a theory that there was no such confusion.
B. Hermès’ Other Claims
As the Court explained in its motion to dismiss ruling,
Hermès’ remaining claims for, inter alia, trademark dilution and
cybersquatting, rise or fall depending on the ultimate resolution
of the Rogers test. See Mot. Dismiss Order at 19-20; see also Deere
& Co. v. MTD Prods., Inc., 41 F.3d 39, 44
(2d Cir. 1994) (citing Rogers,875 F.2d at 1000
) (“The risk [of] some dilution of the identifying or selling power of the mark is generally tolerated in the interest of maintaining broad opportunities for expression.”); United We Stand Am., Inc. v. United We Stand Am. N.Y., Inc.,128 F.3d 86
, 91 (2d Cir. 1997) (“[E]ven if plaintiff suffered some
trademark dilution, defendants’ right under the First Amendment to
use plaintiff's mark to communicate the message might prevail over
plaintiff's rights under the trademark law to avoid all dilution.”)
Because the Rogers issue has yet to be resolved, summary judgment
on these claims is inappropriate on that ground alone.
Beyond that, however, the Court finds that genuine issues of
material fact remain with respect to these claims as well. For
instance, liability under the cybersquatting statute turns on
whether the defendant “has a bad faith intent to profit from that
mark.” See 15 U.S.C. § 1125
(d)(1)(A)(i). And whether Rothschild
acted in “bad faith,” in turn, depends on facts that are plainly
in dispute. On one side, Rothschild argues that he acted in good
faith because he allegedly made efforts -- described above -- to
disassociate Hermés from the MetaBirkins project. On the other,
Hermés insists that Rothschild’s naked attempts to profit from the
Birkin mark clearly show that he has acted in bad faith with
respect to his use of the Birkin mark. Plfs. SOMF 176, 178.
Such issues, like the others described above, are for the jury to
decide.
IV. Conclusion
For the reasons discussed above, the parties’ cross-motions
for summary judgment are denied in their entirety.
SO ORDERED.
New York, NY el Leg
February g, 2023 J S. RAKOF¥, U.S.D.Jd.
26 .