The Brief: Hermès is suing the MetaBirkins creator Mason Rothschild for selling virtual furry interpretations of the French maison’s ultra-exclusive bag as non-fungible tokens (NFTs).
Unintended Consequences: One of the first blockchain legal battles might have the opposite effect as intended. After the lawsuit surfaced, the auction price of MetaBirkins plummeted from a high of $46,000 to about $3,600. The legal kerfuffle, however, may cause their value to grow substantially. Even if Hermès wins, NFTs can’t be eliminated from the blockchain; the closest action is “burning,” which transfers the NFT—the record of sale, not the image itself—to an inaccessible wallet. Translation: Hermés may be unintentionally creating one of the digital art world’s first black market goods. Whoops!
The Defense: Rothschild says his MetaBirkins are original artworks similar to a previous collaboration with artist Eric Ramirez on an NFT called Baby Birkin, a 3D animation of a transparent handbag pregnant with a child. That sold for $23,500—more than the price of an actual Hermès Birkin bag—on the marketplace Basic.Space. Rothschild has also posted disclaimers on his website stating it is not associated with Hermès. Will it be enough?
What’s at Stake: “This is a battle for ownership of luxury in the metaverse,” says Susan Scafidi, academic director of the Fashion Law Institute at Fordham University. “In the virtual world, we can’t rely on claims of scarcity and quality in the same way, and we’ve found a way to create artificial scarcity for what is essentially a digital image via NFTs.”
