NFTs AND THE FAST–GROWING VIRTUAL FASHION MARKET.
MetaBirkin – Digital Artist Mason Rothschild drops 100 ‘Metabirkins’ NFTs through basic space. The Artist has received a cease and desist letter from Hermès. Neither by the fashion house nor real handbags, are luxury NFTs profit making potential or an intellectual property issue?
WHAT ARE NFTs?
NFTs, or non-fungible tokens, are cryptographic assets that give digital items a unique digital identity, assigned via blockchain. This means digital items take on properties once relegated to physical goods, such as scarcity and unique ownership. The first recorded sale of a fashion NFT was the iridescent dress created by The Fabricant and sold for the equivalent of $9,500 in May 2019. The first luxury brand entrant was Gucci’s Aria film, auctioned for $25,000 in May 2021.
A growing number of brands have introduced a wide variety of NFT projects, including Louis Vuitton, Burberry, Nars, Levi’s, Clinique, Dolce & Gabbana. However, as more brands move into the world of digital fashion themselves, we are seeing a rise in digital artists making products based on their designs and trademarks.
Case in point, when Hermès sued Mason Rothschild, the creator of the MetaBirkins NFTs earlier this year. Luxury brands use their design, distribution and marketing to carefully manage how they’re perceived because their image is crucial to how they attract and connect with shoppers. That’s as true online as it is in the physical world. And then this was first released, media outlets incorrectly reported on the MetaBirkins as a partnership with Hermès.
On the other hand, Rothschild has claimed a right to fair use of the iconic Birkin referencing artist Andy Warhol and his paintings of items like Campbell’s soup cans.
Right now, the court has focused on the MetaBirkins as static images. But what if the allegedly infringing object were a digital wearable made for use in an online game or other virtual environment? The crux of the argument here is — where are the lines in the legal relationship between brands and creators making NFTs based on their products?
Sources: Vogue Business, Business of Fashion, LVMH Group