THR Web Features   /   February 21, 2023

Consumer Confusion

The Case of Hermès and the Meta-Birkin

Leann Davis Alspaugh

( THR illustration; Shutterstock.)

While you spent the Monday after the Super Bowl watching the commercial compilations, you were actively, if a little belatedly, participating in the Hard Sell—Ben Affleck taking orders at the Dunkin’ drive-through, Steve Martin swigging Pepsi, and Jack Harlow taking up the triangle after seeing someone in his entourage eating Doritos. At one point in the halftime show, you may have noticed Rihanna pause to pluck a compact from the hand of a nearby dancer and check her makeup—that moment offered a subtle reminder that the mighty Rihanna is a branding force in her own right, a beneficiary of which is her own beauty products line, Fenty. (Fenty branded Super Bowl merch was also available.)

The first objective of advertisers is to change behavior, an aim that depends on creating an impression in the buyer’s mind. If some value or judgment already exists regarding a product, the job is easier. If the advertiser must first educate the consumer or introduce a new product, that hurdle must be overcome before the consumer can be urged to commit to a purchase. In the opening scene of the 2022 film Triangle of Sadness, a gaggle of shirtless male models is teased by a reporter to change their expressions based on whether they are wearing Balenciaga (pouty) or H&M (happy). The movie establishes its satirical intent with this silly scene, demonstrating that fashion is vapid and demeaning and that the mind of the consumer is remarkably easy to manipulate. 

Which brings us to the famous saying about suckers being born every minute, attributed to the great showman P.T. Barnum. Few innovations more clearly show the multiplying numbers of the gullible than the popularity of the NFT. The NFT, or nonfungible token, is a digital certificate associated with a physical or digital asset such as art, music, images, sports-related imagery (although not limited to these). The NFT can be licensed or copyrighted, but unlike currency (or cryptocurrency) it is not mutually interchangeable, hence, not fungible. 

The NFT market has cooled considerably since its 2021 peak. Subsequently, lawyers have been working nonstop to define and refine the NFT’s place in the litigious world of intellectual property. The recent case of French luxury brand Hermès and the Meta-Birkin NFT codified much about the intersection of intellectual property and free expression, but more interesting were the points it made about the idea of brand integrity in the mind of consumers.

In 1986, Hermès, one of the last family-owned luxury fashion brands, brought out the Birkin bag. The story goes that in 1984 British actress Jane Birkin was sitting next to Hermès chairman Jean-Louis Dumas on a flight and complained that she couldn’t find a bag that worked for a young mother. Dumas sketched out a rectangular bag with space for baby bottles inside. A star was born. The Birkin bag quickly took off and became a cult favorite—today, a used one runs around $10,000, while you could spend more than $30,000 for a new one; the curated resale site Farfetch offers a truly hideous one for $100,000. Young mothers are no longer the core of the Birkin bag clientele, it’s safe to say.

When Hermès learned that an artist was selling digital images called Meta-Birkins, the lawyers went into action. The artist, Mason Rothschild (real name Sonny Estival), was sued by Hermès for copyright infringement, arguing that Rothschild’s NFTs diluted its brand and confused customers. Rothschild’s virtual bags, which are covered in colorful faux fur and mimic the Birkin bag shape and style, were, according to the artist’s attorney, artistic expression and protected by the First Amendment. The artist first introduced the NFTs at Miami’s Art Basel in 2021 hoping to increase awareness of “fur-free luxury”; later that year he dropped 100 Meta-Birkin NFTs for sale on the curated social commerce platform, with the slogan “Not Your Mother’s Birkin.” As reported in the Wall Street Journal, on February 8, 2023, a New York court awarded Hermès $133,000 in damages. Rothschild vows to appeal. 

Does the Meta-Birkin seriously compromise consumers’ ability to separate the NFT from the real Hermès bag? 

Handbags come in a seemingly infinite variety of material, style, size, and shape—I have only to consult my own holdings to confirm this. The Hermès Birkin is basically a satchel, rectangular in shape with a short carrying handle. Hermès is not seeking to establish a monopoly on the satchel-style handbag—nobody could do that, but what the company does want to do is protect the “it” bag that the Birkin has become. Keeping the Birkin’s prestige and desirability ever fresh in a fickle consumer’s mind is a delicate matter requiring constant attention.

Some truths however obtain. One cannot carry a Meta-Birkin to stroll down Fifth Avenue; it can be viewed only on  a screen, stored as data on a hard drive or server. One may not possess a Meta-Birkin, only its representation, a digital certificate verifying its virtual authenticity. The fact that the Meta-Birkin can be traded as a digital asset does not contribute to its physicality. It is nonfungible after all. (One might presumably display the Meta-Birkin NFT on one’s phone while it is tucked into a $22,700 Hermès Space Malice mini-bag.) Of course, one may boast about paying five figures for…what now? It would seem then that in empirical terms, confusion is unlikely.

For the makers of luxury goods, one constant source of irritation is the fake. Street vendors in Manhattan sell “Birkins” complete with goldtone metal finishings, contrast stitching, even a Hermès label sewn inside—but only Barnum’s sucker would think it authentic. In the luxury market, price is often the only signifier of the difference between what is real and what is a knock-off. What happens, though, when price fails to signify worth? One Meta-Birkin sold for $47,000 (in cryptocurrency, 10 Ethereum), a price point so close to that of a real Hermès bag that consumers might possibly be confused—if, that is, a consumer’s every buying decision is based exclusively on price, something both illogical and foolhardy. 

Another area of consumer confusion could occur if buyers thought the Meta-Birkins were somehow sanctioned or sponsored by Hermès or that Mason Rothschild was a spokesman for the brand. (Rothschild’s pseudonym is itself confusing, sounding as it does like “Maison Rothschild” and implying luxury by association.) For some time, apparel companies, in particular, have made a point of blurring marketing boundaries as they chase ever more unexpected celebrity endorsements. Those deals with musicians, actors, artists, and athletes—who bring with them considerable free publicity in the form of social media influence—are too lucrative to pass up. Until they aren’t.

This is exactly what has happened to Adidas, which has recently announced that it is ending its association with Kanye West after the rapper made anti-Semitic comments. Industry estimates say the split will cost Adidas around $1 billion in revenue, some $530 million of that in West’s unsold Yeezy brand sneakers. The fear is that consumers might stay away from Adidas thinking mistakenly that West’s opinions were shared by those in the C-suite. This is another shade of confusion complicated by a kind of calculated risk-taking that reveals the cynicism at the heart of most brand marketing: Let’s use each other until it no longer suits. 

The Hermès legal team made an interesting distinction in its defense, referring to Rothschild “not [as] an artist but a brand builder, in that he was building a community, offering loyalty programs like incentives and other features like brands do.” In their desire to thwart Rothschild’s contention that the Meta-Birkin is artistic expression protected by the First Amendment, Hermès also impugned the idea of brand integrity. For six generations, Hermès has sought to protect the character of its brand, cherishing a standard of value built from years of craftsmanship, care, and creativity. This is a legacy that keeps thousands of artisans, executives, retailers, and marketers employed. But if it weren’t for the aspirational behavior of consumers, Hermès would not exist. 

The Meta-Birkin decision may also be a preemptive one as Hermès attempts to protect any future endeavors they may or may not pursue in the virtual marketplace. The confusion that has resulted is not entirely in the mind of consumers. Brands from across the spectrum now have to face a situation that is very confusing indeed: the nature of creativity and the concept of loyalty in the age of the metaverse.