Hermès x Metabirkin – how can luxury brands best protect their IP in Web3?
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Hermès won its case over digital NFTs, so what does this signify for luxury brands exploring Web3?
On February 8th Hermès secured an important legal victory against an artist whose NFTs recreated its iconic designs. Within this short insights article, we’re exploring what this means and best practice when it comes to luxury brands protecting their IP.
In its lawsuit filed in January, Hermès argued that Mason Rothschild misused the iconic Birkin name by selling a collection of 100 MetaBirkin NFTs at the end of 2022. This case is similar to countless others brought by luxury brands against alleged counterfeiters: the French luxury goods company claims Rothschild infringed on and diluted Hermès’ trademark, and that consumers might be confused into thinking Hermès has some association with the MetaBirkins.
The Drum reports that the judge decided – if the name of the NFT range wasn’t enough – that Rothschild’s tokens breached three counts related to copyright, including trademark infringement, trademark dilution, and “cybersquatting,” awarding Hermès $133,000 in damages.
Justin Banon, co-founder of Boson Protocol, explains the importance of the precedent being set. “This is a verdict that clarifies, I think rightly, that NFTs are digital versions or extensions of brands’ consumer products and are therefore protected by trademark law. While still enabling artists to profit from original artwork, this ruling further protects brands’ investment in NFTs and therefore will enhance growth and encourage mainstream investment in the space.
As experts in luxury and digital, we’re constantly exploring the innovative advancements of the Metaverse within the luxury fashion industry whilst ensuring our portfolio of clients are well equipped to protect their brand identity and heritage online.
How can luxury brands best protect IP in Web3?
Luxury Brands have long faced IP issues with product counterfeits and ill third party use of Brand. As we have seen with Hermes, this has now leaked into the online world and is growing in momentum on Web3. The difference on Web3 is that an NFT digital product cannot, in its essence, be duplicated – this is the very nature of blockchain technology with each product having a unique ledger – the historical data attached to the digital file. But there is nothing preventing the other creators and the black market from creating very similar looking collections which are built upon the Luxury Brand’s IP.
There are three ways in which brands can tackle this problem: “Own it”, “fight it” and/ or “join it”. Own it by creating a brand’s own collection and making a bigger noise about the legitimate collection to galvanise the community who would take interest in the Brand IP in the Web 3 space. Fight it by doing exactly what Hermes did – taking the creator to court. Or Join it, and by this I mean join in partnership with the creators to create an official collection. We have seen Tommy Hilfiger do this when they collaborated with 8 UGC Roblox creators, to design the official TH collection on Roblox.
Regardless, the Hermes ruling will be sending a message for creators who are taking advantage of Luxury Brand IP to watch out.
What does this mean for luxury brands entering Web3 and does this ruling strengthen the incentive for brands to get involved with Web3?
Brand’s should not get involved with Web 3 without a strategy or a clear reason why and how they are planning on entering this space. We have seen Porsche’s very costly campaign perform poorly recently – this should act as a warning to know and understand the audience. The incentive to enter the Web 3 should be because the brand’s audience is engaged there and the brand feels like it can effectively and authentically communicate natively with the customer. Without this, failure will surely follow.
(Sarah Keeble, VERB New Business & Marketing Director)
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