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Bit Parts
"Artistic Relevance" Test Applied to NFTs
The U.S. District Court for the Southern District of New York applied an "artistic relevance" test to litigation over the creation and sale of digital non-fungible tokens (NFTs). Hermès International v. Rothschild, 22-cv-384. Defendant Mason Rothschild had created digital visuals of Hermès International's luxury Birkin handbags that he named "MetaBirkins," claimed were "a tribute to" the Hermès handbag, and was selling online via NFTs. Hermes sued Rothschild for trademark infringement in violation of the federal Lanham Act and state law. District Judge Jed S. Rakoff explained for technological context: "When an NFT is linked to digital media, the NFT and corresponding smart contract are stored on the blockchain and are linked to digital media files (e.g., JPEG images, .mp4 video files, or .mp3 music files) to create a uniquely identifiable digital media file. The NFTs and [accompanying] smart contracts are stored on the blockchain (so that they can be traced), but the digital media files to which the NFTs point are stored separately, usually on either a single central server or a decentralized network." District Judge Rakoff agreed with Rothschild that Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), should be utilized to determine whether Rothschild's use of the "Birkins" brand was "artistically relevant" to his NFTs and whether the NFTs were "explicitly misleading" as source identifiers. "[B]ecause NFTs are simply code pointing to where a digital image is located and authenticating the image, using NFTs to authenticate an image and allow for traceable subsequent resale and transfer does not make the image a commodity without First Amendment protection any more than selling numbered copies of physical paintings would make the paintings commodities for purposes of Rogers," District Judge Rakoff noted. But denying Rothschild's motion to dismiss for failure to state a claim, the district judge found: "Even if the 'MetaBirkins' satisfied the artistic relevance prong, the amended complaint contains sufficient factual allegations that Rothschild's use of the 'MetaBirkins' mark is explicitly misleading and thus still actionable under the Lanham Act."
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Vape Musical Found to Be Copyright Fair-Use Parody of Grease
The U.S. District Court for the Southern District of New York granted a motion on the pleadings, under Rule 12(c) of the Federal Rules of Civil Procedure, to the producers of the musical Vape by finding that Vape is a copyright fair-use parody of the 1950s-focused musical Grease. Sketchworks Industrial Strength Comedy Inc. v. Jacobs, 19-CV-7470. Vape producer Sketchworks filed a declaratory action after Improv Asylum NYC Theatre canceled a scheduled August 2019 performance of Vape due to receiving a cease-and-desist letter from Concord Theatricals, the licensing agent for the owners of Grease. Sketchworks argued in its lawsuit that Vape "reexamines Grease from a female perspective in the #MeToo era" and "exposes how the 'humor' and rape-cultured elements of Grease have not aged well." District Judge Laura Taylor Swain noted: "Defendants argue that Vape does not comment on the substance of Grease, but rather comments on society writ large, and therefore is not a parody entitled to protection under the fair use doctrine" under Sec. 107 of the U.S. Copyright Act. But District Judge Swain explained in instead finding a transformative use, "[T]he Court finds Defendants' characterization of Vape to be overly simplistic and incomplete for multiple reasons." "First," the district judge wrote, "Defendants overlook the manner in which Vape mocks various specific elements of Grease, including absurdities in the plot line." Next, Judge Swain continued, "Vape changes certain elements of Grease, including the script and lyrics to songs, in order to emphasize the misogynistic features of the original work." And third, "to the extent Defendants argue that Plaintiff cannot establish fair use because it fails to provide a 'justification' or 'explanation' of how each departure taken from Grease relates to Vape's purpose of commenting on the underlying work, Defendants take too narrow a view of the law."
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