A federal judge in Manhattan on Friday issued an order that permanently bars Mason Rothschild from selling his controversial MetaBirkins NFTs, granting one final request from the French luxury goods maker Hermés after the firm’s legal victory over Rothschild earlier this year.
In February, a jury sided with Hermés, which had accused Rothschild of violating the company’s trademark for Birkin handbags with his line of 100 “MetaBirkins” NFTs—digital tokens tied to pictures of fur-covered, patterned handbags.
“In effect, the jury found that Rothschild was simply a swindler,” Judge Jed Rakoff wrote in a filing. “Hermès proved that Rothschild intentionally misled consumers into believing that Hermès was backing its products.”
Hemés was awarded $133,000 in damages, determining Rothschild’s NFT collection is not a form of protected free speech. The order delivered Friday also permanently enjoins Rothschild on several fronts, significantly restricting the future use of MetaBirkins.
The order prevents Rothschild and associates from marketing, selling, and minting MetaBirkins NFTs, among other restrictions. It also prohibits Rothschild from making statements that could lead people to associate MetaBirkins with Hermés in the future.
Additionally, Rothschild is not allowed to provide any benefits to Metabirkins holders that would incentivize people to purchase the NFTs, such as airdrops. However, he is required to airdrop Friday’s court order to people that currently hold the tokens.
Hermès’ lawsuit against Rothschild is indicative of the challenges brands face in protecting intellectual property when it comes to NFTs, an emerging frontier where big brands often consider launching digital collectibles, but must deal with a community built up around decentralization and a permissionless culture.
In February, the court found Rothschild was liable for trademark infringement, trademark dilution, and cybersquatting. Despite his artistic expression defense, the jury found Rothschild intentionally misled consumers about Hermès’ backing of the project.
After its legal victory, Hermès claimed in a March filing that Rothschild “continues to promote the sale” of MetaBirkins NFTs on social media and marketplace listings, “while also seeking to collect a royalty for these sales.”
The luxury goods maker requested that Rothschild be forced to transfer MetaBirkins NFTs he still owns to a wallet designated by Hermés. In addition, Hermés wanted Rothschild to relinquish control of the collection’s Ethereum smart contract.
Judge Rakoff elected not to side with Hermés on that front, explaining, “MetaBirkins NFTs are at least in some respects works of art,” and a narrower injunction was necessary “out of an abundance of caution” with respect to free speech.
While Rothschild can still maintain the ownership of MetaBirkins NFTs, he is ordered to give up any domain names associated with Hermès Birkins’ trademark, including metabirkins.com.
Rothschild has been ordered to transfer the domain name by July 15, which will subsequently be archived by Hermés.
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