Axios Crypto
February 02, 2023
The "Not Your Mother's Birkin" NFT creator tussles with Hermès. Plus, Meta's Reality is burning cash, for now.
Today's newsletter is 1,214 words, a 5-minute read.
👜 1 big thing: Hermès NFT trademark trial
Illustration: Sarah Grillo/Axios
The crypto industry doesn't need any more legal battles, but the one playing out in a Manhattan court this week between a major brand and an artist over NFTs could prompt others like it, Crystal writes.
Why it matters: The NFT boom was many things — but it was a boon for artists, who found financial freedom in marketing and selling their works directly to collectors.
- Hermès International's case against creator Mason Rothschild, however, could be precedent-setting in the busy intersection between luxury goods and NFTs.
Driving the news: Hermès is suing Rothschild, the creator of Birkin-inspired digital works such as the Baby Birkin and MetaBirkins. That case went to trial on Monday—the first ever on NFT trademark.
State of play: The once-lucrative business of NFTs has fallen on hard times, like much of the digital assets ecosystem — trading stopped being profitable around May 2022 for much of the industry, according to NonFungible.com.
- But major brands have been circling, driving a surge in NFT trademark applications last year. Even if they don't have NFT strategies today, many — like Hermès — are thinking about it.
The big picture: “Rothschild is obviously arguing that they are entitled to sell artistic works," John Ferdinand, partner at IP firm Marks & Clerk tells Axios.
- "The crucial issue is not just the act of creating the works themselves, but how the Birkin/MetaBirkin trademarks were used to promote the works and how consumers would interpret such use."
Zoom in: "The key question is whether consumers actually believe there to be some commercial connection between Hermès and the NFTs sold by Rothschild," Ferdinand says.
- “There’s a distinction between the act of creating artistic works, per se, and then using third-party brands to sell them to others.”
The intrigue: "The fact Hermès has been making plans to enter the metaverse since 2019 — i.e. before Rothschild’s activity — may be slightly relevant in assessing whether Rothschild infringes their rights," he said.
- Hermès International filed an NFT trademark application in August 2022, describing virtual retail store services featuring virtual goods.
Details: The bag at the heart of the case, named after actress Jane Birkin, is among Hermès more recognizable wares — a handbag coveted and held up as a status symbol by the uber-wealthy.
- There are supposed waitlists and production caps.
Of note: Rothschild's first reference to Birkin was in the one-of-one Baby Birkin, an animation of a translucent bag featuring a fetus suspended in space within. It sold in May 2021 for 5.5 ETH, worth about $47,000 at the time.
- That's several times more than the average going price of a Birkin bag, though not more than a diamond-adorned crocodile one sold at auction.
- The second project from MetaBirkins was a follow-up, with 100 fuzzy handbag NFTs referred to as "Not Your Mother's Birkin."
State of play: Much of the MetaBirkins collection has been unlisted on NFT marketplaces like OpenSea and Looksrare, so floor prices are unreliable. For what it's worth, the last one quoted on the latter site at 3 ETH.
What we're watching: A jury will decide whether the NFTs in question infringed on the trademark of Hermès' iconic Birkin bag.
🏜 2. Metaverse land-grab


Brands from Fiji to Zales to Yves Saint Laurent want to peddle digital versions of their real-world wares. Digital bottled water, engagement rings and handbags, Crystal writes.
- Well, they at least want to stop others from doing it first, in case they want to pursue those ideas later.
- Other recent applications come from Nationwide, the car insurer, burger joint White Castle and liquor brand Beefeater.
What's happening: True, new applications have declined every month from March to December 2022.
Yes, but: Last year's total of 7,746 was still more than triple the previous year's 2,154, according to compiled USPTO data.
The bottom line: Trademark battles would rise as a result, not just between NFT artists and brands, but among the brands themselves, says Marks & Clerk's Ferdinand.
- "There might also be greater friction between brand owners who are trying to vie for space," he says.
🤳 3. Meta's reality check
Illustration: Gabriella Turrisi/Axios
Public companies investing in faraway ideas will have to start answering to shareholder questions rooted in reality checks, Crystal writes.
Driving the news: Mark Zuckerberg, founder and chief of Meta, fielded barbed questions about its money-burning Reality Labs segment during the social media company's earnings call yesterday evening.
- Meanwhile, Coinbase NFT was forced to announce on Twitter that it wasn't shutting down, ending exaggerated rumors of its death.
Why it matters: CEOs have to maintain a balance of pleasing shareholders in the near-term while investing in businesses that have a long way to go before turning a profit.
- Growing demands for cash conservatism and an employee base freshly shaken from layoffs add to the pressure.
What they're saying: "We're constantly tuning the roadmap," Zuckerberg said in response to questions about Meta's long-term investment strategy as it relates to Reality Labs and its efficiency.
- "Even if we outperform our business goals this year, we're going to stick with this," he said.
- Reality Labs' segment outlook for 2023: Losses are expected to rise.
Details: The segment, which includes augmented and virtual reality-related consumer hardware, software and content, recorded a $4.3 billion loss for the December-end quarter and a $13.7 billion loss for 2022.
Of note: Zuckerberg said that metaverse software business constituted the smallest slice of that unit.
Shareholders might have similar questions for Coinbase Global during its upcoming earnings call, expected on Feb. 21. Especially after rumors on Twitter of its NFT platform being shuttered.
What they're saying: "We recently shared that we are pausing creator Drops on the NFT marketplace to focus on other features and tools that creators have asked for," Coinbase NFT tweeted, adding:
- "To be clear: We are not shutting down the Coinbase NFT marketplace."
Context: An NFT creator appeared to have mistaken Coinbase's decision to pause collection drops for a complete shuttering.
Be smart: The marketplace was late to the NFT boom by its April 2022 launch, and trading volumes are still at fractions of the largest players such as OpenSea.
- One Twitter user responded to Coinbase's soothing missive with a sharp retort: "Thank god. The 7 people who use your platform were worried."
🦌 4. Catch up quick
🐥 MakerDAO enabled a 1% savings rate for the DAI stablecoin, and OlympusDAO committed $77 million. (The Defiant)
🥞 The supply of Ethereum's ETH has reached an all-time low, as transaction activity increases slightly. (The Block)
🍌 Berkshire Hathaway's Charlie Munger, in an op-ed, calls for a crypto ban. (Wall Street Journal)
Top coins
🍊 5. Culture hash: They said it shouldn't be done
Screenshot: @LuxorTechTeam (Twitter)
Crypto Twitter personality Udi Wertheimer and the mining group Luxor seem to be teaming up on making a line of wizard NFTs on Bitcoin.
- The approach takes advantage of 2021's Taproot upgrade to the original blockchain, which gives it more programmable functions than it has previously had, Brady writes.
Zoom out: The Bitcoin community has been divided by adding NFT functionality.
- During the NFT boom of 2021, many bitcoiners mocked the digital art movement, so the same ones are less than thrilled to see it on their favorite chain.
- It can't be stopped, though, such is censorship resistance.
How it works: The NFTs rely on new software called Ordinals, which makes it possible to track a single satoshi (the smallest unit of a bitcoin) and append some data to it.
This newsletter was edited by Pete Gannon and copy edited by Carolyn DiPaolo.
Bitcoin prices are up a wee bit after the latest Fed rate hike.—C & B.