U.S. District Judge Jed Rakoff said the permanent injunction was justified because Rothschild’s continued marketing of the NFTs would likely confuse consumers and irreparably harm the company.
Rakoff denied Rothschild’s requests to throw out the verdict or hold a new trial.
“Defendant’s entire scheme here was to defraud consumers into believing, by his use of variations on Hermes’ trademarks, that Hermes was endorsing his lucrative MetaBirkins NFTs,” Rakoff said. “Nothing in the First Amendment insulates him from liability for such a scheme.”
Representatives for Hermes and Rothschild did not immediately respond to requests for comment on the decision.
NFTs are unique tokens on blockchain networks that are often used to verify ownership of digital art. Hermes sued Rothschild last year over his MetaBirkins, 100 NFTs associated with images depicting the luxury house’s prized Birkin handbags covered in colorful fur.
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Hermes called Rothschild a “digital speculator” and the NFTs a “get rich quick” scheme that infringed its “Birkin” trademark and created the false impression that the fashion house endorsed the tokens. Rothschild, whose legal name is Sonny Estival, countered that the works were an absurdist statement on luxury goods and immune from the lawsuit based on protections in the 1st Amendment of the U.S. Constitution for art that uses trademarks in an artistically relevant way without explicitly misleading consumers.
A jury ruled for Hermes in February and awarded the company $133,000 in damages.
Hermes said in a filing in March that Rothschild continued to market his NFTs after the jury’s verdict. It asked the court to force him to stop and to turn over his remaining tokens and post-trial profits.
Rothschild told the court that Hermes’ request went “far beyond what is appropriate in a case, like this one, that involves artistic expression.”
Rakoff largely granted Hermes’ request, but decided not to order Rothschild to transfer the tokens out of an “abundance of caution” for 1st Amendment concerns.
The case is Hermes International v. Rothschild, U.S. District Court for the Southern District of New York, No. 1:22-cv-00384.
For Hermes: Gerald Ferguson, Deborah Wilcox and Oren Warshavsky of Baker & Hostetler
For Rothschild: Rhett Millsaps, Christopher Sprigman, Mark McKenna and Rebecca Tushnet of Lex Lumina; Jonathan Harris and Adam Oppenheim of Harris St. Laurent & Wechsler
