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13 April 2023

When is a bag not a bag? The METABIRKIN and BEVERLY HILLS / GREENWICH POLO CLUB cases

METABIRKINS / BIRKIN

The eagerly awaited decision of Hermès International, et al. (Hermès) v Mason Rothschild (Rothschild), in the US has been issued. On 8 February 2023, Hermès succeeded in its US court action against artist Mason Rothschild, establishing that his use of the non-fungible token or NFT he was calling  “MetaBirkins” infringed the fashion house’s trade mark rights.

Further information on NFTs, The Blockchain and the Metaverse can be found here.

In this case, Hermès sued Rothschild for promoting and selling “MetaBirkins”, an NFT collection inspired by their iconic Birkin bags. Hermès claimed that consumers would be misled into believing that the MetaBirkin NFTs sold by Rothschild were associated twith, authorised by or originated from Hermès, when in fact, they had nothing to do with them. Hermès claimed that both the name BIRKIN and the digital images of their handbags were being infringed, with Rothschild also registering the domain name ‘MetaBirkins.com’.

Hermès provided survey evidence to show confusion between their trade mark rights and Rothschild’s digital products, as well as providing evidence of their own commercial plans to enter the Metaverse. Hermès argued that the BIRKIN brand is highly distinctive, and they had attained a significant reputation in the name in the fashion industry.

Rothschild claimed that his First Amendment Rights allowed him the right of artistic expression and argued that he was not infringing any rights protected by Hermès. He also explained that he put disclaimers on his MetaBirkin project to explicitly state that he had no affiliation with the Hermès brand.

The case was heard before a jury and they rejected Rothschild’s defences and sided with Hermès, finding Rothschild liable for trade mark infringement, trade mark dilution and cybersquatting the domain ‘MetaBirkins.com’. They found that there was confusion between Hermès and Rothschild, and that the use of the NFTs was intended to mislead consumers. Hermès was awarded $133,000 in total damages ($110,000 for trade mark infringement and $23,000 for cybersquatting).

This case establishes that Intellectual Property Rights for tangible products extend to the ‘virtual world’, and these rights can be enforced. As technology is moving at such a fast pace, it is imperative that brand owners look to proactively protect their intellectual property in the Metaverse as well as the ‘real world’. Creators of virtual products must equally be cautious when incorporating the images and rights of others into their creations.

BEVERLEY HILLS POLO CLUB  / GREENWICH POLO CLUB

There have been ongoing disputes between Lifestyle Equities, the owner of “Beverly Hills Polo Club”, and Greenwich Polo Club for many years. In 2002, Greenwich Polo Club (a US-based polo club) registered their logo in the European Union for a range of fashion and clothing items. In 2018, Lifestyle Equities sought to invalidate the mark in respect of all of the goods covered on the basis of their earlier Beverly Hills Polo Club mark (registered in 1998) covering ‘luggage’. They also applied to revoke the Greenwich Polo Club registration on the basis of non-use, and that revocation application was successful except for the goods ‘men’s, women’s and children’s clothing’.  Lifestyle Equities appealed, unsuccessfully, to the Board of Appeal at the EUIPO and then appealed further to the General Court of the European Union.

The main issue at hand related to the terminology of the goods covered by the two registrations. The EUIPO defined the term ‘luggage’ using the Collins dictionary definition of ‘suitcases and bags you take with you when [travelling]’ and took the view that this did not include the term handbags. They also determined that luggage was different in purpose and nature from the goods ‘men’s, women’s, and children’s clothing’ covered by the challenged registration, on the basis that these goods would generally be made by different manufacturers and distributed through different trade channels.

On appeal at the EUIPO, the Board of Appeal found there was no competition or ‘aesthetic complementarity’ between the respective goods, and therefore there was no likelihood of confusion.

 

 

Lifestyle Equities argued that handbags should be viewed as a subcategory of luggage. They also suggested that consumers would frequently use their luggage items in combination with their clothing items and argued that matching clothing and luggage items were often sold by the same fashion brands.

The General Court took the view that handbags were ‘small bags used to carry things such as money and keys when going out’. Therefore, even though handbags have a utilitarian function, similar to that of luggage, they are distinguished by the fact that they have an additional aesthetic function, contributing to the external image or ‘look’ of consumers. As such, consumers would apply a different set of criteria to their decision making when purchasing luggage compared to the purchase of a handbag.

The General Court concluded that, even if some consumers choose luggage on the basis of their taste in clothing, there was no commercial overlap between the protected goods, and they were viewed to be neither in competition nor complementary with each other. Inevitably the appeal was dismissed. Please click here for more information.

This is one of many cases ongoing between the companies, and it will be interesting to see how the brands look to move forward. At a broader level, it highlights the importance of a well-drafted specification of goods and services to ensure comprehensive protection is in place, along with regular reviews of the protection in place and filing of new applications to cover expansion of product ranges.