Lawsuits have been flying for some time now regarding non-fungible tokens- NFTs, ownership, and copyrights. The increased popularity of NFTs has inspired new methods for artists to create and disperse art. Along with these new creation measures, many legal questions and ramifications have yet to be answered and have led to a wave of litigations and motions winding their way through the judicial system.
Immutable ownership is one of the most critical aspects of NFTs and represents a major benefit for creators and buyers alike. The evolution of art ownership, be it, in-game assets, music, photography, video is tied to these digital assets and their identities are verifiable on a blockchain. There is a fast-expanding grey area around copyright, intellectual property, and trademark laws. Here are two of the biggest NFT lawsuits to date.
Hermes vs Mason Rothschild
In May 2021, luxury brand Hermes sued artist Mason Rothschild over the sale of Birkin bag NFTs. Rothschild was inspired by the fashion house’s famous and expensive (each fetching $10,000 or more) line of Birkin bags and launched a single ‘Baby Birkin’ NFT. The NFT sold for 10 ETH or $47,000. Following this successful project, the artist launched a full collection of one hundred ‘MetaBirkin’ NFTS at the sale price of .03 ETH or $3,000. Talk about democratization in luxury brand prices.
Rothschild says that he has reimagined Hermes Birkin bags in a fanciful way to offer “one-of-a-kind contemporary colors and graphic executions.” Inspired to find fur alternatives, the artist designed a way to uphold cruelty-free design practices.
This escalated to a lawsuit. Hermes claims that they did not take legal action sooner because they believed Rothschild’s initial NFT was a one-time occurrence (and probably the cost of a Birkin or two). Hermes is suing for trademark infringement, trademark dilution, cybersquatting, and injury to business reputation. A new legal precedent is being set to accommodate NFT art and creative freedom and factoring in the First Amendment rights and intellectual property. In February 2022, Hermes served Rothschild with a cease-and-desist order.
Nike vs StockX
Nike has lodged a 50-page long complaint against online reseller StockX. The complaint claims that StockX has sold five hundred Nike branded NFT sneakers, which has impacted the company’s legitimacy and reputation. In addition, Nike claims that the reseller has inflated the NFT prices.
StockX is valued at $3.8 billion and the disputed NFTs sneakers are still online. Nine premium Nike sneakers make up the exclusive ‘Vault’ collection on StockX and they are still available online.
Nike plans to release their own NFTs since they have recently acquired art studio RTFKT. The shoemaker plans to use NFTS as a way to further interact with their customers.