Italy: NFT — Parallelism between the first Italian and American lawsuits

 

NFT (non-fungible Token) is a distributed ledger-based technology developed on blockchains in which each client in the network can record, validate, update and store verifiable and non-modifiable data. Indeed, if anyone can through the simple act of "copy-paste" or "save image from the web" obtain a copy of the same illustration, NFTs succeed in "trapping" the OG copy providing a unique “non-fungible” one, consequently creating verifiable digital rarity.

The first claim issued in this field which plays the role of the forerunner between the subsequent ones related to the same specific matter around the world, is dated 2022 and concerns the well- known fashion house Hermes and the artist Mason Rothschild. The latter has been accused of having unlawfully created a collection of NFTs called "Metabirkin" depicting the iconic Birkin bag, the design of which is registered as a trademark. Different allegations were brought forward, ranging from trademark misuse with associated consumer confusion, to damage to the brand's goodwill. However, the American artist's response wasn’t long in coming, arguing how the bags in question convey a message of denunciation against Hermes, tainted with acts of animal cruelty in manufacturing the fine leather of its very expensive bags. Therefore, according to the artist, the just mentioned products would embed values shielded by the freedom of speech protected by the First Amendment. Moreover, aimed at supporting its own defense set-up, Rothschild attached illustrious precedents like the so-called "Campbell soup" and "Coca Cola bottles" made by Andy Warhol, bearing strong similarities to the case at stake.

The second lawsuit which more closely concerns us, thus being worth breaking down, is the one issued before the Court of Rome on July 20, 2022, in relation to playing cards depicting currently retired players wearing Juventus FC uniforms during game scenes. In this case, in contrast to the previous one, the issue was more straightforward given the lack of artistry of the works and thus the clearly abusive use of others' trademarks.

Although in both cases the court ruled in the same direction pleading guilty the two defendants, it is interesting how the two cases show differences. Indeed, it isn’t by any chance that in the U.S. context the court did not go so far as to affirm the counterfeiting of someone else's trademark. As the matter of fact, it is likely how was valued by the jury not only the absence of the wording "Hermes" on the bags, but also, and above all, the defense based on freedom of speech (reading the trial documents in fact we can perceive how strong indecision was present whether to state the presence or absence of this last element). It is realistic to think that the willingness to convey values and opinions, in the absence of the prejudicial discovery revealing the author's actual strong desire to enrich himself, could have been considered decisive, especially by virtue of the celebrated precedents set by Warhol. At the same time, it is very probable that even in the Italian context in presence of potentially artistic activity the freedom of expression protected under law n. 633 of 1941 would have been invoked, especially with reference to its article 1 drafted in order to protect intellectual property with a creative soul.

Although these decisions helped to shed a light on the subject matter, important shadows still remain not only regarding the correct legal qualification of NFTs, which is inevitably fundamental to understanding the applicable discipline, but also and especially regarding their withdrawal from the market if declared abusive. Indeed, the removal at issue is everything but easy given that once the transaction is done through the Blockchain, the NFT crystallizes on it remaining visible to anyone. Moreover, by virtue of the connection to following blocks, any specific cut-out intervention is out of question. As a consequence, even if the acquiring third-party was reached by blocking its account, consequently generating considerable economic damage to her/him (an assessment of which would have to be made separately), no intervention could be done on the blockchain which would be still showing the abusive token potentially traceable by other clients of the ledger (in particular, in case of public Blockchains anyone may be able to look it up).

Finally, it will be interesting studying the next approaches to the matter that will develop in other countries and which will certainly help to define a common line that need to be held in such an international field of which the legal frame is still matt.

 

For further information, please contact:

Stefano Seminara, Lawyer

bureau Plattner, Milan

e: stefano.seminara@bureauplattner.com

t: +39 02 25060760

 

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