Nike Files Trademark Infringement Lawsuit Against Sneaker Resale Marketplace StockX Over NFTS
The global sports shoe and apparel maker Nike Inc. has accused StockX LLC, a marketplace that is for reselling of sneakers, of minting non-fungible tokens (NFTs) with its trademarks without taking any permission from it and then selling the NFTs at exorbitant prices.
According to a breach of a trademark lawsuit filed earlier in the week in a federal court in Manhattan, United States, Nike claimed that StockX is “blatantly freeriding, almost solely, on the back of Nike’s iconic brands and related goodwill.”
“Without Nike’s authorization or approval, StockX is ‘minting’ NFTs that prominently use Nike’s trademarks, marketing those NFTs using Nike’s goodwill, and selling those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to believe that those ‘investible digital assets’ (as StockX calls them) are, in fact, authorized by Nike when they are not,” the sneaker maker said.
The legal tussle is the most recent example of NFT-related litigations. NFTs have grown in popularity and become more mainstream in recent years, including at Nike.
In December, the company decided to purchase RTFKT, a company that makes digital products such as sneakers and leverages blockchain technology. Nike has started submitting trademark requests for “downloadable virtual products” and related services.
“Given Nike’s longstanding use in this space, StockX’s unauthorized and unapproved branding of Vault NFTs with Nike trademarks is all the more likely to confuse consumers, create a false association between the parties, jeopardize the capacity of Nike’s famous marks to identify its own digital goods in the metaverse and beyond, and, and harm Nike’s reputation through an association with inferior digital products,” Nike said in the suit.
No comment on the legal case was made by StockX. According to an earlier report by Bloomberg News, following a boom demand and sale of this digital asset during the pandemic, the firm has been in discussions with banks about going public in the first half of 2022. After a secondary tender offering in April, it was valued at $3.8 billion, the company said.
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Last month, StockX announced the launch of Vault NFTs, a service that allows customers to trade sneakers without ever having to own them. Non-fungible tokens are attached to tangible objects held in a warehouse and may be delivered at any time, allowing traders to buy and sell sneakers quickly. According to the lawsuit, the NFTs are “much more than just actual Nike sneakers.”
According to Nike, there are also new items that have been coupled with existing StockX services and advantages, such as exclusive access to corporate releases, promotions, and events.
“Nike does not sell StockX’s services or exclusive access to such benefits,” the sneaker maker said. The case is Nike Inc. v StockX LLC, 22-cv-983, U.S. District