BoF Insights | Why Ownership Matters to NFT Shoppers

The recent legal battle between luxury brand Hermès and digital artist Mason Rothschild provided a tough real-life example of what happens when the metaverse collides with trademark law.

Earlier this month, a federal jury in New York ruled in favour of Hermès after determining that Rothschild’s “MetaBirkin” non-fungible tokens (NFTs) were an infringement on the fashion house’s trademark of its Birkin bag and did not qualify under US law as artistic expression protected under free speech, as Rothschild argued.

Among the factors put before the jury was the potential confusion among consumers shelling out $450 for the NFT that they were purchasing an authentic Hermès-endorsed asset.

Whether consumers were indeed duped will remain an open debate, but what is clear is this and other events — such as the $69 million sale by artist Beeple in 2021 and the celebrity hype around communities like Bored Apes in the last year — have heightened consumer awareness of the concept of digital ownership.

“The value of property rights in digital assets is part of the ongoing process of consumer education,” Akam Nigash, chief executive of avatar technology company Genies, told BoF Insights. “As consumers become more adept in the crypto space, they will gain a greater appreciation for the value of NFTs.”

This is already happening among some consumers. In a survey of consumers aged 15 to 56 in the US conducted by luxury research firm Altiant on behalf of BoF Insights, about two-thirds of the respondents rated digital ownership as important.

BoF Insights Chart Watch

As blockchain-based assets become more mainstream, fashion brands can expect the importance of ownership to only grow even more among their consumers and to start crafting digital strategies now to reflect that.

For more in-depth analyses on the digital asset landscape, see the full report from BoF Insights: The Opportunity in Digital Fashion and Avatars.