Can brands fight unauthorized NFTs?

(AFP) – Given the growing popularity of “NFTs”, these digital files sold in the form of certified unique tokens, brands and artists are battling issues of copyright and infringement with colossal amounts of money in the game.

Outraged by the marketing without permission from the NFT of Nike sneakers, the American brand filed a complaint Thursday in New York against the online trading platform StockX and demanded compensation.

Last month, the luxury group Hermès also sued artist Mason Rothschild, who auctioned off 100 “MetaBirkins” NFTs with the image of the house’s famous bag, and raised tens of thousands of dollars.

– Can these complaints succeed? –

At present, it is still difficult to know whether the brands can win the battle, especially in the case of Hermès, believes lawyer Annabelle Gauberti, who specializes in the creative industries sector.

To defend his “MetaBirkins”, Mason Rothschild relies on the first amendment to the US Constitution, which guarantees freedom of expression and protects artists in the country’s courts.

The “fair use” argument, which gives exceptions to copyright in the event of a parody, for example, often wins the case in US or British courts, adds Me Gauberti.

However, she believes Mr Rothschild will have a hard time convincing a judge of the artistic value of his work. “The message he carries is not easy to understand, beyond the desire to raise large sums. His legal team wants a lot of work,” she says.

The dispute between Nike and StockX resembles a more classic commercial dispute, as the e-commerce platform has never claimed that its NFTs were works of art. It remains to be seen how trademark law can be translated into a digital world.

– What scheme for NFTs? –

In a response to Hermès posted on Twitter, Rothschild compares his “MetaBirkins” to Andy Warhol’s famous painting of Campbell’s soup cans.

“The fact that I sell art using NFTs does not change the fact that it is art,” he defended.

Edward Lee, who leads an intellectual property program at Chicago-Kent Law School, disagrees with this comparison. In an article published on Bloomberg Law, he explains that the Campbell Soup brand had never expressed a desire to start selling works of art, whereas Hermès could well decide one day to create his own NFT.

The fact that no material is exchanged during the transactions of these “Non-fungible tokens” further complicates the possibilities for regulation.

“Many people imagine that the content of NFTs is inside a token – but this is not the case, and for this reason there is no ban on reproduction,” emphasizes Primavera De Filippi, co-author of the book “Le blockchain et la loi “. “, in the magazine Business of Fashion.

– Can brands protect themselves? –

Hermès asked artist Mason Rothschild to destroy his “MetaBirkins”, which the NFT platform OpenSea agreed to withdraw from sales.

“Even if the brands win their lawsuits, how will they then sue a consumer who has already bought an NFT, or prevent them from reselling it at auction? In terms of use, digital is a wild west,” Me Gauberti nuances, however.

According to her, brands should fight back by creating their own official NFTs. Nike did so with the acquisition of RTFKT in December, a company specializing in the design of virtual sneakers.

“Attack is the best defense,” notes Me Gauberti. “But at the moment, these brands are still cautious (at the thought of creating their NFTs) because their core business remains material products, and they’re still observing whether the metaverse will really take off.”

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