Metaverse February 9, 2023
Hermes’ Win in MetaBirkins NFT Lawsuit Could Spell Disaster for Metaverse Economy
Luxury goods company Hermes International won a U.S. lawsuit against “MetaBirkins” NFTs creator Mason Rothschild – a ruling that could have massive implications on how items are bought and sold in the fledgling metaverse economy.
The 186-year old French multinational sued digital artist Rothschild in 2022 for trademark infringement following the release of MetaBirkins – a collection of 100 different and colorful Birkin handbag-inspired NFTs covered in fake fur.
US Court: NFTs are not art
Hermes argued that the digital artworks diluted their brand, confused current and potential customers and damaged its own plans for developing non-fungible tokens, or NFTs, in future, according to a Bloomberg Law report.
Also read: Judge Used ChatGPT to Make a Court Decision
On Feb. 7, Hermès won its lawsuit. According to the report, nine people sitting as a federal jury in Manhattan awarded the company $133,000 in total damages. The jury found Mason Rothschild liable for “trademark infringement, trademark dilution and cybsersquatting.”
After three days of deliberations and hearing testimony from several live witnesses and the defendant, the jury also found that Rothschild’s non-fungible tokens are not protected under the U.S. Constitution’s First Amendment, which guarantees freedom of speech.
In other words, the artists’ MetaBirkins NFTs are not art, per the verdict. A non-fungible token is an immutable and unique unit of data stored on the blockchain. NFTs can be used to represent items such as photos, videos, audio and other types of digital files.
Hermes’ case against NFTs ‘crucial’ for metaverse
The ruling is “crucial” for the emerging metaverse economy, observers say. NFTs play a major role in the metaverse, particularly in gaming metaverses. They can be used to “buy and sell accessories and collectibles such as skins, or even land.”
Ilman Shazhaev, founder and CEO of blockchain gaming metaverse Farcana, told MetaNews that the Hermes win was a defeat of the non-fungible token industry as a whole, not just the digital artist Mason Rothschild.
“The case of Hermès winning a lawsuit against NFTs is crucial. Many companies that work in metaverses are hesitant to use non-fungible tokens because there are no clear regulations,” he said, adding:
“Metaverse company strategies depend on tokenomics and such rules are essential. Without digital assets most metaverse projects struggle to identify sources of income.”
Shazhaev drew comparisons between the Hermes – Rothschild case and another one in the UK after which NFTs were recognized as property. “In a way, the court decision contradicted [what the] UK Jurisdiction Taskforce’s declared,” he explained.
“In 2022, the Law Commission published a consultation on its proposals to reform the law on digital assets. So after this case, we will have a clear path for using non-fungible tokens. It is a precedent. How does the government handle the tax issue in this case?” he added.
The Hermes – Rothschild case has drawn huge attention because of what it could mean for NFTs going forward. Experts say it could influence how intellectual property infringement and free speech rights “apply to non-fungible tokens and other areas of the digital world.”
Bloomberg quoted intellectual property attorney and artist Alfred Steiner saying, “Rothschild’s loss may have a chilling effect on NFT artists who want to use trademarks in their projects.”
“The commentary in Mason’s work was probably more difficult to discern because it was subtle,” he said. “It may have been lost on a pool of jury members or the general public.”
However, not everyone agrees that the ruling spells doom for NFT use in the metaverse. Speaking to MetaNews, Sandy Carter, senior vice president of Web3 domain service Unstoppable Domains, said the case could boost collaboration between brands and creators.
“This was a monumental decision on NFT and trademark law and one that will significantly benefit the utility of NFTs in the metaverse,” Carter stated.
“This ruling incentivizes brands and creators to work together and it is likely that we can expect more cases of luxury brand collaboration in the metaverse as a result. It also reiterates the appetite for these luxury items in the metaverse.”
Rothschild criticizes Hermes, ‘broken justice system’
Mason Rothschild criticized the verdict on Twitter, saying that the “multibillion dollar luxury fashion house” pretended to “care about art and artists.” But the company claims instead to “have the right to choose what art IS and who IS an artist.”
“Take nine people off the street right now and ask them to tell you what art is but the kicker is whatever they say will now become the undisputed truth. That’s what happened today,” he shouted.
“A broken justice system …What happened today was wrong. What happened today will continue to happen if we don’t continue to fight. This is far from over,” he said.
Take nine people off the street right now and ask them to tell you what art is but the kicker is whatever they say will now become the undisputed truth. That’s what happened today.
A multibillion dollar luxury fashion house who says they “care” about art and artists but..
— Mason Rothschild (@MasonRothschild) February 8, 2023
In 2020, NFTs emerged as a cultural storefront of the cryptocurrency industry, bringing up novel possibilities in the curation and circulation of art. NFTs swayed fascinated endorsements from pop celebrities such as Snoop Dog, Lindsay Lohan, Grimes and several others.
Digital artist, Beeple, sold an NFT for more than $69.3 million in 2021. Twitter founder, Jack Dorsey, converted his first ever tweet into a non-fungible token and sold it for $2.9 million.
Rothschild plans to appeal decision
Mason Rothschild’s 100 MetaBirkin NFTs are made after digital images of Hermès’ iconic Birkin luxury handbag. The artist created and sold the NFTs in late 2021, earning around $1.1 million, reports say.
Hermes sent a cease and desist shortly after and sued Rothschild in January of the following year. In reaching its verdict, the jury determined that the NFTs are more similar to “consumer products subject to strict trademark laws to protect brands from copycats.”
In closing arguments on Feb. 6, Rothschild’s lawyer said: “It was an artistic experiment. He wanted to see what kind of value people would ascribe to these two-dimensional pictures,” the lawyer said.
“It is unlikely that people who would pay thousands of dollars on bags would be confused these #MetaBirkins were from Hermes. He has a Constitutional right to create his MetaBirkins art work, and to make money from, as long as he doesn’t mislead people.”
Rothschild and his legal team are planning to appeal the decision, according to reports.
Taco Bell’s Metaverse Wedding Actually Happened
Last year, fast food chain Taco Bell claimed to have found a couple that would marry in its eponymous metaverse. Months went by without further updates from the outlet, but now it appears that the unusual wedding actually went ahead.
The lucky couple from California had the ceremony in February of this year, and details of the event have now become public.
The Taco wedding bells
In August of 2022, Taco Bell ran a competition to find a couple it said would be married in its metaverse. The setting would be virtual but it was promised that the wedding would be real.
Sheel and Amruta from California were the lucky couple. To keep in theme with the high-tech nature of the metaverse event, Sheel said he wrote his vows with help from ChatGPT.
“I promise to always keep your phone charged,” Sheel said at the virtual altar.
“I promise to help you look for your AirPods every single morning… I promise to be your human gravity blanket whenever you ask for it. I promise to laugh at your jokes… I promise to never let our love become stale, and to always keep everything spicy and exciting. I will cherish and adore you for all eternity and spend all my days with you by my side.”
As it turned out, the Taco Bell metaverse was actually hosted within Decentraland, an open 3D virtual environment in which the land itself is owned by users. Unlike the common public perception of a metaverse that is accessed via headsets, Decentraland is browser-based, making the environment easy for anyone to enter.
Guests included people near and dear to the couple, but random Decentraland users were also apparently able to gatecrash.
A Twitch streamer going by the handle Legiqn recorded his attendance at the celebration to preserve the evening for posterity. As Legiqn pointed out, the couple had a long history with the fast food chain.
“Their first date was at a Taco Bell,” said the influencer. “I don’t think it gets anymore romantic than that.”
This takes the cake
Besides being Taco Bell-themed, the wedding also conformed to Indian traditions that the couple and their family wished to be respected.
Actor Kal Penn, known for the Harold & Kumar film series, was among those in attendance.
On conclusion of the wedding, when the couple were pronounced husband and wife, Penn interviewed the happy pair to see how they felt about their Taco Bell wedding experience.
“I’m super stoked,” Sheel said.
“It’s real,” Amruta added. “We’re married.”
From there the guests headed to the reception so the pair could have their first dance as a married couple. That was not the end of the highlights, however; there was still the small matter of who might be the next lucky person to be married in the Taco Bell metaverse.
Twitch streamer Legiqn was determined to catch the bouquet when the bride threw it over her shoulder.
“Yes, bouquet time, this is what I’ve been most excited for,” said Legiqn as he prepped himself to ‘grab’ the flowers. “This is where my gamer skills come in,” he announced to his followers as the big moment arrived. Unfortunately for Legiqn those gamers skills did him little good, as a user named Bleace caught them instead.
With the formalities over, guests danced on the virtual dancefloor to celebrate the unforgettable occasion, as a QR code flashed on the screen so they could all order Taco Bell. If that’s not a happy ending, I don’t know what is.
Metaverse-themed Coworking Hub Opens in Central London
A dedicated hub for metaverse-centric startups has opened in the West End of London. Huckletree’s 22,000 square-ft office, located at 213 Oxford Street and spread across two floors, is the company’s fifth hub in the UK capital and the first seeking to “bring together Web3, creatives and investors in one place.”
Announcing the space back in September, Huckletree said the hub would see “Web3 builders working alongside Metaverse pioneers, avant-garde designers, animators, digital disruptors and a passionate investor community.”
Also Read: Mark Zuckerberg Hasn’t Forgotten the Metaverse
A space to create
As well as providing a space for web3 entrepreneurs and builders to work, Huckletree has put an expert advisory board in place to help establish the venue as a go-to workspace for industry professionals.
Board members include Founder of metaverse-focused FOV Ventures David Hanes, Jack Smyth, who manages Chanel’s web3 strategies Chanel for BrandTech Consulting, and Daniella Loftus, head of digital fashion firm This Outfit Does Not Exist.
“Web3 and the metaverse have the potential to transform every industry as we know it, and the community working behind the scenes, be they on the investment or business side, are in need of a space to call home that can also be a platform for funding, deal-flow, ideas, talent, and togetherness,” Huckletree CEO Gabriela Hersham told CityAM last year.
Themed around Web3 and the metaverse, our vision for Oxford Street is to house the most curated community of impactful brands, talent and investors, building the future of web – and the future of everything 🤘
Discover more >> https://t.co/ODD3hqcoZ5 pic.twitter.com/fCt8PFf2u6
— HUCKLETREE (@huckletree) January 4, 2023
“I’m excited to see how a space like this can help to push the physical realm and physical possibilities of Web3 to be a place where new, old, imagined and physical can converge,” added board member Ashumi Sanghvi, who is also the CEO of creative production agency MAD Global.
The workspace will be equipped with demo areas wherein tenants can stress-test new technologies and products. There is also a rooftop terrace for events, an NFT gallery for artists to display their talents (or collectors to show off their collection), an immersive meta-lounge for gaming, and several reading booths.
As well as supporting startups during working hours, the venue is expected to host web3 workshops, Q&A sessions, product demos, and meetups.
Huckletree Oxford Circus already has a few notable tenants who operate in the web3 space, including Surreal DB, MassMutual Ventures, Project A, Haven and FivePointFive. The company’s other London-based hubs include Huckletree White City, based in the Mediaworks building, and a space dedicated to GovTech, AI, security and policy in Westminster.
Appetite for physical coworking
Critics may wonder why a dedicated physical workspace is required for metaverse ventures. Isn’t the whole appeal of the metaverse that you can don your VR headset and trade ideas in a colorful virtual environment, while maintaining the same levels of productivity? In theory, yes. But though many startups favour a remote-working policy, others still prefer a hybrid or office-based model.
In a recent blog post, Gabriela Hersham pushed back against the notion that embracing the metaverse means plugging into VR and abandoning face-time with colleagues. “We’ve seen the appetite to gather in physical places for the Web3 community, take the NFT event in New York in 2022, which was claimed to the Superbowl of NFTs,” she wrote.
“Where there is community, there is a need to gather, exchange and actively collaborate… We believe there is a need to bridge connections and unlock new opportunities and deal-flow, whether that be introducing traditional creatives into how to design in the metaverse, or to upskill corporate brands on how they can unlock blockchain technology or NFT tokens for their customer campaigns or back-ops functions.”
Huckletree might be the first metaverse-oriented workspace in London, but it isn’t the first globally. Last year, EmpireDAO leased 36,000 square feet in Manhattan to create a coworking space for web3 project builders. Spread across six floors, it offered hot desk memberships tokenized as NFTs. However, the venture hit difficulties in crypto winter and closed shop at the turn of the year.
Mark Zuckerberg Hasn’t Forgotten The Metaverse
Despite mainstream media claims that Meta and Mark Zuckerberg intend to pivot from the metaverse, it is clear that the immersive web remains a big part of the company’s future plans.
Perennial skeptics are nevertheless attempting to use Meta’s most recent round of job cuts to construct a false narrative around the metaverse.
What Zuckerberg actually said
On Tuesday Mark Zuckerberg announced that Meta would cull a further 10,000 jobs from its workforce following earlier layoffs of 11,000 in November.
In a 2,000+ word letter, Zuckerberg covered far more ground than that, as the Meta CEO outlined some of the most important technology trends that will shape the company over the near to medium term. As Zuckerberg points out, one of the most important will be how the company applies AI to its apps and services.
“I believe that we are working on some of the most transformative technology our industry has ever seen,” said Zuckerberg.
“Our single largest investment is in advancing AI and building it into every one of our products. We have the infrastructure to do this at unprecedented scale and I think the experiences it enables will be amazing.”
Mainstream media has made much of the fact that the single biggest investment from Meta in the immediate future will be AI. The quote prompted CNN to ask “What metaverse?” and Business Insider to declare that Zuckerberg and Meta are moving “away from the metaverse.”
In reality, Zuckerberg’s letter immediately goes on to add:
“Our leading work building the metaverse and shaping the next generation of computing platforms also remains central to defining the future of social connection. And our apps are growing and continuing to connect almost half of the world’s population in new ways.”
During the course of this most recent address to staff, Zuckerberg mentions the metaverse two times and AI three times. Fairly poor evidence that the company is turning its back on the virtual realm.
The future of Meta
Zuckerberg is clear about where he sees the future of Meta, stating that the company is focused on building “inspiring products that improve people’s lives.”
The Zuck adds: “We do this with AI to help you creatively express yourself and discover new content, with the metaverse to deliver a realistic sense of presence, with new media formats to create richer experiences, with encryption to let you communicate privately in more and more ways, and with business tools to help reach customers, create opportunity and grow the economy.”
Clearly, AI is set to play a significant role in the future of the company, but it is only one of many strands that Zuckerberg and Meta intend to pursue. Where AI is applied, it won’t necessarily be perceived by the general public.
The latest hype cycle surrounding AI is highly focused on chatbots, but Meta has other applications in mind. The company will explore how improved AI technology can be used to increase the productivity of its engineers – something that will be important in the company’s “year of efficiency.”
Meta believes that certain workloads and processes will be automated over time, and that AI will help to identify obsolete processes. With Meta shedding 21,000 staff in the course of a year, the AI should certainly have its hands full.
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