NFTs: A Legal Landmine

This is essay 2 of 7 essays for The Tech Progressive Writing Challenge. Join the conversation in the build_ Discord.

I’ve always wanted a Hermes Birkin bag. Not to wear, because backpacks are more versatile for men than purses. Nor to display, because I’m not Rachel Zoe. But for status, to be honest.

Birkin bags are the brainchild of former Hermes chief executive Jean-Louis Dumas dating back to 1984. It was created to address the needs of the jet-set, competing with Chanel for the attention of the rich and famous women. Its supply is intentionally limited, not disclosed by Hermes, and is priced starting at $10,000 and goes into six figures because of the material. 1

Take a high demand product, with low supply, in a luxury market and you’ve got a money maker. Counterfeits abound, and Hermes is diligent about protecting its brand equity.  

Which brings us to an issue. In December 2021 artist Mason Rothschild offered 100 virtual Birkin bag-focused NFTs via OpenSea. Selling in total $800,000 as of this writing, Hermes, can’t have been pleased.

“[Hermes] did not authorise nor consent to the commercialisation or creation” of these Birkins, they wrote in a statement. 2

Move away from luxury purses or shoes (ahem, Nike); what would stop me from making a Mickey Mouse version? What could Disney do? It’s not uncommon for artists to use brand images but because it’s meant as parody or satire it gives potential protections to the artist. In this context, the defence against Hermes or Disney would be thinner than the ice on Elsa’s sidewalk.

Brands could argue this is creating confusion to customers and needs to be stopped. Or that because the NFTs are tied to the value of the physical good they are trading on, compensation is due. 2

I don’t have answers for you yet. We’re going to pursue this purse in coming posts. (Say that three times fast.)

Stay tuned.

Sources

1: https://www.thelist.com/364291/heres-why-its-so-hard-to-buy-a-birkin-bag/

2: https://www.thefashionlaw.com/from-baby-birkins-to-metabirkins-brands-are-being-plagued-in-the-metaverse/