The advent of the metaverse heralds a new potential revenue stream for those who are willing to take their chances in this uncharted digital space. The result? Heaps of money as seen from the sales of non-fungible tokens (NFTs), just like the one sold by Los-Angeles based digital creator Rothschild. The artist’s MetaBirkin NFT collection, “Baby Birkin” has accumulated nearly US$450,000.

The reimagined Birkin bags created by Rothschild come in faux fur and in an assortment of colours. The widely popular handbag was created by the French luxury fashion house Hermès back in 1984 and has a price range of US$9,000 to US$400,000. A custom Birkin bag could cost even more and one has to be placed on a waiting list before getting it.

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With the NFT market heating up, more and more brands and artists are looking towards the metaverse. Fashion brand, in particular, like Gucci, Givenchy, Burberry and Dolce & Gabbana have all released their own versions of the digital asset. This can come in the form of a short film to in-game accessories. According to analysts at Morgan Stanley, sales of luxury NFTs could surpass US$56 billion by 2030. Brands will want to have a slice of this enormous pie.

Now, if these NFTs were released officially by fashion brands, it would not encounter problems such as infringement of trademark laws. The same, however, could not be said for the MetaBirkins as the artist Rothschild had not consulted with Hermès before releasing it on the NFT market.

In a statement to the Financial Times, Hermès said, “Hermès did not authorise nor consent to the commercialisation 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”.

“These NFTs infringe upon the intellectual property and trademark rights of Hermès and are an example of fake Hermès products in the metaverse,” it added.

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To which the artist replied, “The First Amendment gives me every right to create art based on my interpretations of the world around me.” To say that it was a wholesale copy would be inaccurate as Rothschild did tweak the shape of his virtual bags — albeit the overall silhouette still resembles the original.

The case for Hermès is also strong as apart from calling out for an infringement of its trademark, these MetaBirkins could be seen as diluting the brand. Rothschild claimed that Hermès had sent him a cease-and-desist letter and connectively, the marketplace that trades these MetaBirkins had also taken down his collection.

Another potential problem that could be foreseen is the growing issue of counterfeits. The luxury sector, not just pertaining to fashion but also watches, has been plagued by products that look alike to the original copies. In an article by Harvard Business Review, “The total trade in fakes is estimated at around US$4.5 trillion, and fake luxury merchandise accounts for 60 per cent to 70 per cent of that amount”.

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Another 40 per cent of sales were conducted online and with the sudden surge in interest for the metaverse, the number could rocket even higher. Hence, it is also in Hermès’ interests to protect the public from purchasing unauthorised products.

As of now, Hermès has not filed suit against the artist. There are a number of factors to consider should the brand go forward with its legal claim. On the topic of the metaverse, perhaps the brand is waiting for the opportune time before it officially makes its foray into the digital world.

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