Everybody knows about Hermès and its well-renowned Birkin bag. This bag is the most important and the feather in the cap of the Maison. It is an iconic product (if you would like to know more about this category of products, we wrote an article about it that you can find here).
You might have heard that recently Hermès and its bag were the subjects of a controversy surrounding these so-called “MetaBirkins”.
This is an example that opens the horizon to thought reflections on fashion and NFT sectors’ regulations. The digital world has started a radical revolution that, besides creating new cultural scenarios, expands on every aspect of reality as known and regulated.
But let’s take a deeper look at what exactly happened.
What are MetaBirkins?
Mason Rothschild, a Los Angeles-based digital developer, debuted the MetaBirkins, a digital counterpart of the classic tote, at Art Basel Miami last month. Only 100 distinct NFTs were made available. The metaverse accessory has the same silhouette as the 37-year-old Birkin, but it is fur-lined and has a bright pattern (something that Hermès usually doesn’t do to keep the line simple and clean).
The collection of reinvented Birkin features “one-of-a-kind contemporary colors and graphic executions” designed by Rothschild in cooperation with artist Eric Ramirez. It was created in response to the growing demand for fur alternatives as a way to educate other firms and designers that adhering to cruelty-free design processes and preserving one’s particular artistic vision are not mutually contradictory.
The publication of this collection generated a lot of interest, and the release was covered by different publications, like Elle.
Of course, Hermès was interested in these digital bags as well. Hermès, owner of all intellectual property rights on the Birkin bag model, has publicly defined the MetaBirkins NFT as a fake in the metaverse of its bag and its brand, and has immediately taken action. It addressed a warning letter to the creator of the NFTs in question as well as to the marketplace OpenSea to stop any further marketing of the NFT in question.
Rothschild defended his work, claiming that fair use protects his NFTs from being taken down. He also criticized the Maison for failing to assist artists such as himself.
“There is a shifting tide of invention and change, and it is your responsibility as a fashion giant to magnify rather than stamp out young creatives and artists,” he said. “Your actions have the potential to shape the Metaverse’s artistic future.”
Who is right? How is copyright on NFT regulated?
What we know now about copyright on NFTs
In theory, NFTs can represent almost any real or intangible property, including artwork, music, videos, collectibles, trading cards, video game virtual items, or even real estate. In sum, an NFT is the digital version of a certificate of authenticity, embodied in the blockchain. This raises a crucial question: are NFTs copyright protected?
Because NFTs do not meet the basic requirements for copyright protection, they are unlikely to be covered. They represent data on a blockchain, which under intellectual property law would not be considered an original work of authorship. However, as the Los Angeles Magazine reports with this question, the doubt arises:
Is it necessary to obtain a license or permission from a rights holder before using copyrighted content in an NFT, as it would be for a sample on a record or something similar? Yes, in general. If someone is trying to make an NFT out of someone else’s work, it should make sure to get permission from the copyright owner first. Copyright law grants an exclusive “bundle of rights” to the owner of the copyright in a work. These rights include the ability to reproduce, create derivative works, distribute copies, perform publicly, and show publicly.
From this perspective, Hermès has a trademark holder of the Birkin bag, and didn’t give any permission to Rothschild, resulting in the artist’s infringement of the trademark.
Mason replied regarding the First Amendment as the basis for his right to create digital works, including NFT, by reinterpreting the reality around him.
“Hermès did not authorize nor consent to the commercialization or creation of our Birkin bag by Mason Rothschild in the Metaverse,” the company said, adding that Hermès has not yet entered the NFT market because it values the “tangible expression of handcrafted physical objects”.
What to do? Censor the expressive freedom or regulate the metaverse?
It appears to be clear that since the metaverse concept is still rather new, it is not properly regulated yet. Anyone thinking of buying an NFT should keep in mind that this is a recent and speculative market with many unknown risks–including the risk of a 100 percent loss. NFTs have no inherent value and are only worth what someone else would pay for it.
BUT. This can be controlled when a physical good has its digital counterpart linked.
As MyLime, we create this link between the two realms in two ways: first, with our digital passport, we can create an existing digital twin of the product, then we convert the digital twin into a proper NFT. In this way, the digital counterpart gains an added value as it is backed by the physical product and not created for a merely speculative reason.
In the aforementioned case, how would have the situation gone if Hermès had digitally supported its Birkins? We just know that right now, the MetaBirkins are no more on sale on the OpeanSea marketplace, but have moved to Rarible. There, their price ranges from 3,8 ETH (approx. $12.500) to 249 ETH (approx. $815.500). In theory, MetaBirkins is taking away the revenue stream from Hermès if it wanted to market its bags as NFTs. “The public could be confused and think the MetaBirkins are official”, said Colin Bell, head of intellectual property at law firm Brabners.
Regulations in this sector are needed as soon as possible to safeguard firms and artists as well in this new and fast changing environment.
