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Hermès Sues NFT Artist over “MetaBirkins” Collection

Legal action is ongoing after Mason Rothchild released a series on Rarible of 100 Birkin bag-inspired non-fungible tokens (NFTs) with simulated fur entitled “MetaBirkin” in December 2021. These NFTs share no affiliation or profits with Hermès, the luxury fashion brand behind the highly coveted “Birkin” bag. Yet, today these NFTs are going for a high of 249 ETH or approximately $780,000, which is nearly double the most expensive Hermès Birkin sold at auction in real life. 

 However, the current rules on NFT counterfeits in the Metaverse are very unclear and ownership over digitally created products is extremely uncertain. Even if Hermès wins its case against Rothchild, the subject NFTs cannot be erased as they are tokens permanently recorded on the Ethereum blockchain. Nevertheless, this lawsuit is breaking new legal ground for what is to come with intellectual property rights in the world of Web3.

The rise of this NFT series’ popularity has prompted the French fashion house to fight back. Hermès believes that these NFTs have “infringed upon the intellectual property and trademark rights of Hermes and are an example of fake Hermes products in the metaverse”. After failing to stop Rothchild with a cease-and-desist letter, Hermès filed a trademark infringement and dilution lawsuit against Rothchild in New York federal court. However, Rothchild says he “won’t be intimated” and maintains that his virtual interpretation of the famed bag is an artistic commentary on the bags and brand and as such should be considered “fair use”. Furthermore, Rothchild has stated: “[i]t’s quite clear from reading Hermes’ complaint that they don’t understand what an NFT is, or what NFTs do.” In this regard, Rothchild is now attempting to secure a dismissal of the suit based on his First Amendment rights.   

Nike Files Lanham Act Claims Against StockX Over NFT’s

Sportswear company Nike recently sued StockX, an online reseller of shoes and other goods, claiming that StockX began selling virtual products using Nike’s trademarks.  The lawsuit filed in the Southern District of New York alleges that these unauthorized non-fungible tokens (“NFT’s”) are likely to cause confusion and to create a false association in the minds of consumers that there is an association between Nike and the Nike-branded NFT’s.  In addition to monetary damages, Nike seeks an injunction blocking such sales of StockX’s NFT’s. 

The five (5) count complaint was filed near the time of Nike releasing its own NFT’s, including the “MNLTH,” which was released on or about February 8.  This NFT features the “Nike swoosh” on both sides, and suggests that an unknown object is encased within the box.  See https://opensea.io/assets/0x86825dfca7a6224cfbd2da48e85df2fc3aa7c4b1/1

Supreme Court Strike Down Federal Ban on Sports Wagering

On May 14, 2018, the Supreme Court issued a landmark 6-3 ruling in favor of striking down the Professional and Amateur Sports Protection Act (“PASPA”), which came into effect in 1992.  PASPA was a federal law that barred state-authorized sports gambling on baseball, basketball, football and several other sports; a few states, however, and particularly Nevada, were exempted from the law because they had approved some form of sports wagering prior to when the law was enacted. 

The decision in Murphy v. Ncaa, Nos. 16-476, 16-477, 2018 U.S. LEXIS 2805 (May 14, 2018) originated in a case from New Jersey, where the state argued that PASPA violated the Tenth Amendment because it was essentially compelling states to prohibit sports wagering.  Writing for the majority, Justice Alito held that “[j]ust as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”  Id. at 40-41.  With the federal ban on sports gambling lifted, states are now given the green-light to legalize sports betting if they choose.  In the months leading up to the high court’s decision – and assuming that PASPA would be struck down – various research firms estimated that at least 30 different states would likely offer sports betting within the next five years. 

IP IN THE FRCP

It is fairly well known that the framers of the United States Constitution had a profound respect for intellectual property, and that Article I, Section 8, Clause 8 of the U.S. Constitution explicitly establishes copyrights and patents on a federal scope:
 

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A Possible Future for Non-Fungible Tokens in Intellectual Property Ownership

In April of this year, IBM and IPwe[1] announced a project to use Non-Fungible Tokens (NFTs) to record the ownership of patents on a blockchain run by IBM.[2] This development is meant to make it easier to buy, sell, and license patents.

Patent ownership is transferred through legal documents known as “assignments,” which function similarly to deeds for real property. Just as a deed is recorded at your local county courthouse to prove the ownership of real property, so are patent assignments recorded at the U.S. Patent & Trademark Office (“USPTO”) to prove the ownership of patents and trademarks.[3]

The issue is that the process of drafting, signing, and recording assignments can be slow. Because of this, buying and selling patents may feel more like the slower speed of buying and selling a house, instead of feeling like the faster speed of buying and selling a financial asset (i.e. a publicly-traded stock or bond). The benefit of such a slower process is, like for real property, the chain of title for a patent can be seen on the USPTO database of assignment records.

Now, this project between IBM and IPwe attempts to combine the transparency of a recordation system with the speed of modern financial transactions by representing the ownership of a patent with an NFT, and recording that NFT on a public blockchain. IPwe plans on using its “Global Patent Marketplace” platform as the online marketplace for buying and selling patent NFTs, which IPwe expects to be working by the last quarter of 2021.



RETURN OF THE SUPREME COURT.

The Supreme Court returned to session this morning in accordance with a long-held tradition of opening the annual term on the first Monday in October.   The recent changes to the Court’s composition, coupled with the potential impact of the decisions looming on the horizon, promise to make this session a particularly interesting one.

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I’VE GOT GOOD NEWS (FOR PLAINTIFFS) AND BAD NEWS (FOR DEFENDANTS)

On October 13th, a bill increasing protection of intellectual property, namely, the Prioritizing Resources and Organization for Intellectual Property Act of 2007 (the “PRO-IP Act”) was signed into law by President Bush.    

The Act increases civil and criminal penalties for piracy and counterfeiting and creates a national “IP czar” who will be appointed by the Senate.  The Act also enhances the Department of Justice’s (“DOJ”) power to enforce IP rights by authorizing law enforcement agents to seize property from copyright infringers. 

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LAPPING THE PACER?

For years now the federal judiciary has made documents filed in federal court litigation available through a search platform known as PACER (Public Access to Court Electronic Records.)    While the documents available through PACER are in the public domain, access to the documents requires registration as the documents are not indexed by commercial search engines.   Moreover, a government fee of eight cents a page is charged for reading, printing, or downloading the documents.  

The registration and fee requirements arguably have the effect of limiting public access to these records.  Accordingly, an individual named Carl Malamud has been asking paying users of PACER to send him their documents and has begun publishing these for free on his website.   

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WEST ENCOUNTERS EAST AIRING ON PBS STATIONS ACROSS THE COUNTRY

West Encounters East, a film by firm client Stella Holmes, a Miami-based art collector and museum trustee, is currently airing on PBS stations across the country.  West Encounters East explores the Japanese diaspora to Latin America through the eyes of artists whose work emerges from the Asian-Latin American cultural mix.  The film will be airing locally in South Florida on WPBT on May 6, 2013 at 9:00 p.m. and on May 10, 2013 at 10:00 p.m.    Click here for WEE air dates and times in your area.  The 7-minute Trailer for West Encounters East can be viewed below.

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The 2013 Ig Nobel Prize Winners

The 2013 Ig Nobel Prizes Ceremony was held at Harvard University last night.   Established in 1991, the Ceremony allows Nobel laureates to present ten awards for odd and unusual research projects.  This marks the 23rd year of the awards, which continues the tradition of honoring scientific achievements that “first make people laugh, and then make them think.”  

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