Weekend Briefing: Trademark Limitations of Fashion NFTs to be Decided in Court

Several lawsuits across the fashion industry will set precedents for everything from NFT trademark restrictions to how many stripes can be on a pair of socks. Read on for a detailed look at some of those lawsuits, as well as a look at California’s new fur ban and the impact Balenciaga’s advertising scandal will have on Kering’s earnings last year. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes and the Glossy Beauty Podcast for interviews from the beauty industry. – Danny Parisi, sr. fashion reporter

The fashion industry’s legal teams are currently rehearsing as numerous court cases between brands continue. Adidas is suing Thom Browne over the designer’s use of stripes, for example. While Adidas was content to avoid a lawsuit when Thom Browne added a fourth stripe to distinguish it from Adidas’ signature three stripes, the designer’s recent move into sportswear has led to a lawsuit from Adidas.

At Hermes, the luxury company is suing artist Mason Rothschild over his sale of “MetaBirkins,” NFTs based on Hermes’ Birkin bags but with which Hermes had nothing to do. The trial is scheduled to begin on January 30. Hermes’ argument is simple trademark infringement, while Rothschild will argue that the NFTs have a clear “parodic” and “absurd” intent.

The trial is reminiscent of a similar ongoing legal battle between Nike and StockX. The former sued the latter for selling NFTs with images of Nike sneakers. StockX’s argument at the time was that NFTs were merely token ownership rights over a real pair of sneakers held in StockX’s vaults.

StockX and Rothschild have essentially taken opposite approaches to the legal actions they have faced from the brands whose images they used in the NFTs: StockX argues that its NFTs are legal because they are closely related to the actual product owned by StockX and would not be should be considered a separate entity. On the other hand, Rothschild’s argument is that his NFTs are so separate from the Birkin bags they depict that they should be considered works of art in their own right.

The outcome of both cases will set precedents and shape the future of NFTs in fashion.

California is officially a fur-free state

A California law passed in 2019 finally went into effect on January 1, completely banning the sale of fur in the state. Namely, the bill does not prevent the sale of used fur, so resale and consignment platforms, especially for luxury fur-loving consumers, will have an advantage in California for now.

But, in general, fur has become less popular in fashion in recent years, with major luxury brands such as Moncler, Chanel and all of Kering’s brands no longer selling it. In the next decade, new fur clothing could become an obscure offering across fashion.

Balenciaga’s scandal will affect Kering’s earnings

The Balenciaga scandal that rocked the company late last year is likely to have a tangible impact on Kering’s upcoming earnings, due to be reported in February, according to a new report from HSBC. Kering’s fourth-quarter earnings will be “the worst they can be,” the report said. Balenciaga accounts for about 10% of Kering’s sales.

This hampers Kering’s growth mindset. The company hoped that late 2022 and 2023 would be a period of additional growth. But Alessandro Michele leaving Gucci, the Balenciaga scandal and a slowdown in international luxury sales, particularly in China, could set Kering back.

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