1:22-cv-00384
S.D.N.Y.Jun 23, 2023Background
- Hermès sued Mason Rothschild over his "MetaBirkins" NFTs and the domain metabirkins.com, alleging trademark infringement, dilution, and cybersquatting. An eight-person jury found Rothschild liable on all counts and awarded $133,000 in damages.
- Rothschild marketed NFTs using variations of Hermès’ Birkin marks; the jury found he intentionally designed the project to confuse consumers and thereby waived First Amendment protection.
- At trial the court instructed the jury under Rogers v. Grimaldi principles (and treated the NFTs as containing some artistic expression as a matter of law), but required Hermès to prove the use was not First Amendment–protected.
- Post-trial Rothschild moved for judgment as a matter of law or a new trial and sought to interview jurors; Hermès moved for a permanent injunction and disgorgement of profits from post-trial sales.
- The court denied Rothschild’s motions, granted a permanent injunction (including transfer of the metabirkins.com domain and prohibiting further misleading use), ordered disgorgement of profits earned after trial (with a schedule for accounting), but declined to order surrender/destruction of the NFTs or smart contracts.
Issues
| Issue | Hermès' Argument | Rothschild's Argument | Held |
|---|---|---|---|
| Adequacy/structure/substance of jury instructions (First Amendment/Rogers) | Instructions correctly applied Rogers and were favorable to Rothschild (court treated NFTs as expressive and required Hermès to prove lack of protection). | Instructions misled jurors by sequencing and misstating law, causing improper verdict. | Court rejected defendant’s challenges (no reversible error; counsel had consented; instructions were if anything pro-defendant). |
| Sufficiency of evidence on infringement and likelihood of confusion (Polaroid factors) | Presented survey evidence, media misattribution, similarity and other Polaroid factors supporting likelihood of confusion. | Evidence (esp. of actual confusion) was insufficient for a reasonable jury to find liability. | Court held a reasonable juror could find liability; survey and circumstantial evidence supported the verdict. |
| Permanent injunction and scope (eBay factors; disclaimers; transfer/destruction of NFTs/smart contracts) | Injunction needed: irreparable harm (TMA presumption), inadequate legal remedies, balance of hardships favors Hermès, public interest supports injunction; transfer of domain and disgorgement appropriate; disclaimers insufficient. | TMA presumption only shifts burden of production; narrow relief (disclaimer) would suffice; transfer of smart contracts would harm bona fide purchasers and third-party rights. | Court granted permanent injunction (including domain transfer and ban on misleading use), applied TMA presumption, rejected disclaimer as adequate, ordered disgorgement for post-trial profits but declined to order transfer/destruction of NFTs/smart contracts. |
| Motion to question jurors about extraneous information | N/A (Hermès opposed) | Jurors may have relied on outside information; defendant sought to interview foreperson and others. | Denied: speculation unsupported; no reasonable grounds to probe; post-verdict juror statements insufficient to warrant inquiry. |
Key Cases Cited
- Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) (test for when Lanham Act claims against expressive works are barred by the First Amendment)
- Twin Peaks Prods., Inc. v. Publications Int’l, Ltd., 996 F.2d 1366 (2d Cir. 1993) (interpreting Rogers intent-to-mislead standard)
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (multi-factor likelihood-of-confusion framework)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (four-factor test for permanent injunctive relief)
- Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct. 1492 (2020) (principles guiding award of defendant’s profits under Lanham Act)
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (limits on Lanham Act claims that effectively seek to protect authorship)
- Car-Freshner Corp. v. Am. Covers, LLC, 980 F.3d 314 (2d Cir. 2020) (bad-faith intent and its relevance to likelihood of confusion and remedy analysis)