A first-of-its-kind law case has historically taken place, one that decides how NFTs, or non-fungible tokens, are subject to intellectual property law. The case saw French luxury fashion brand Hermès triumph in court over the NFT creator of a collection of virtual handbags that it said violated the signature Birkin bag trademark. 

The case closed on Wednesday and saw a nine-person jury in New York decide that the NFT collection was not protected under the First Amendment, and awarded Hermes $133,000 in total damages, Bloomberg Law reported.

The NFT collection being challenged was entitled MetaBirkins and was created by Mason Rothschild. The 100 NFTs came in several different colours and were covered in fur instead of leather. Some depicted famous paintings like Vincent van Gogh’s The Starry Night. The bags were originally sold for $450 but were resold on the secondary market for prices approaching the physical Birkin Bags’ price tag of more than $10,000. They were really cute, despite being illegal. 

This is the first NFT jury decision around intellectual property, but there are other cases in the works. Online marketplace and clothing reseller StockX is entangled in a lawsuit with Nike that involves NFTs. The shoe and apparel giant sued StockX last year because it argued that its NFTs of Nike shoes infringed on the company’s trademark rights.

So, what does this mean for the NFT community? Essentially, more care needs to be taken and many Web3 creators may need to tread more carefully with the projects they produce. Companies may also seek to do more to protect their intellectual property when it comes to NFTs, cryptocurrencies, and the metaverse.

Post case, Hermès has itself been planning to release its own line of NFTs and the company argued during the case that the MetaBirkins collection would harm its prospects, Bloomberg reported.

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