Case Update: Rothschild Attempt to Avoid Payment Falls Flat
Rothschild Attempted Stay on Hermes Verdict Payment
A federal court verdict in favor of Hermes International took on an interesting twist just before the start of the new year, with the defendant “Mason Rothschild,” (real name Sonny Estival) petitioning the judge in the Southern District of New York to grant a stay of collection on the $133,000 verdict against him.
Rothschild Attempts Stay on Verdict Payment to Hermes
The underlying suit was resolved by a unanimous jury verdict last February, finding Rothschild liable for trademark infringement, trademark dilution, and cybersquatting and awarding both monetary damages and permanent injunctive relief. Rothschild has appealed the adverse judgment, which is pending before the Second Circuit. On December 12, 2023, Rothschild requested that the Court stay collection of the money damages portion of the judgment and waive the requirement that he post a bond during pendency of the appeal.
While Rothschild based his request for relief on a provision of the federal rules of procedure applicable only to injunctive relief, rather than money damages, the Court evaluated his request under the assumption that he intended to seek a stay of collection pursuant to Federal Rule 62(b), which states that “[a]t any time after judgment is entered, a party may obtain a stay by providing a bond or other security.” As the Court noted, the purpose for this rule “is to ensure that the prevailing party will recover in full if the decision should be affirmed, while protecting the other side against the risk that payment cannot be recouped if the decision should be reversed.” In layman’s terms, this means that a court may, in its discretion, grant a stay of collection on a monetary judgment if the party on the hook for those damages provides an acceptable alternative means of securing the award.
Rothschild Offers MetaBirkins as Security for Hermes Verdict Payment
The interesting twist here comes in what Rothschild offered as security in lieu of a bond—the very NFT artwork that lead to the verdict against him. Essentially, Rothschild proposed to the Court that he place in escrow the MetaBirkins smart contract and the MetaBirkins NFT artwork as collateral for the judgment that resulted from his use of the very same items. Separate and apart from Rothschild’s audacity in offering as security the very items he used to infringe and that resulted in the verdict and damages against him, the Court noted that “in virtually the same breath,” Rothschild admitted he “is unaware of a way to place a monetary value on the MetaBirkins smart contract" and that “the NFT art market is virtually non-existent at the moment.” On that basis, the Court denied Rothschild’s motion, finding that “there is no conceivable basis for concluding that valueless items are ‘an acceptable alternative means of securing’ a $133,000 judgment.”
View the original article on the case:
Hermès Defeats MetaBirkins in the First NFT Trademark Trial
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