The Metaverse: Heaven for Creativity or Hell for Intellectual Property?

With the expansion of blockchain technology and the Metaverse, NFTs have grown increasingly prevalent where creators from all over are designing their own versions of soda cans to jewelry to luxury bags. Now, one of the most popularized NFTs has been targeted with a lawsuit—Mason Rothschild’s MetaBirkins. The longstanding French luxury design house, Hermès, is now suing Rothschild for trademark infringement over sales of his MetaBirkins due to their spitting similarities with Hermès’ iconic Birkin bags. This lawsuit presents a variety of issues within the transition into the Metaverse by brands and other third party creators that leads to the overarching question: does the Metaverse act as heaven for creativity or hell for intellectual property instead?

From Hermès’ perspective, MetaBirkins are virtually just Birkins that Rothschild has ripped off from the original Birkin by merely adding the word “meta” to it. Rothschild has clapped back at such remarks by emphasizing that MetaBirkins are a “playful abstraction of an existing fashion-culture landmark” with its fuzzy designs and vibrant colors. Hermès has largely refused this explanation of creative expression by reflecting that “the title of ‘artist’ does not confer a license to use an equivalent to the famous Birkin trademark in a manner calculated to mislead consumers and undermine the ability of that mark to identify Hermès as the unique source of goods sold under the Birkin mark.” As this lawsuit on MetaBirkins unfolds, a deeper concern looms behind regarding the diminishing power and status of the Hermès brand if Rothschild ends up winning the case. Hermès’ biggest problem is not the simple creation of these MetaBirkins but rather the diminishing abilities for Hermès to offer products and services in virtual marketplaces with increased competition beyond just their traditional luxury competitors.

For centuries now, Hermès has been regarded as one of the most exclusive and sought-after brands in the luxury world due to purchasing barriers where only the rich and privileged had a chance to obtain a Birkin. Currently, in the physical world, Birkins are priced around ten thousand dollars while a MetaBirkin can range from nineteen thousand dollars to forty-six thousand dollars. Whether it’s in its physical or metaphysical form, the Birkin or MetaBirkin highlights the idea of scarcity that leads consumers to chase after it for the sake of social and psychological consumer needs. The ability to merely purchase something so rare in either form illuminates the quality, value, and social image of the consumer within the world today. The most important move for Hermès is to diminish competitors like the MetaBirkin that may strip away its positioning within the luxury industry in the Metaverse. So while creativity and intellectual property may have seemed to be the strongest factor within the Hermès lawsuit launched against Rothschild, the fear of them losing their power and sales overweighs in all elements.