Nike Sues StockX in Federal Court Over Sneaker NFT Trademark Infringement
Written by SOURCE on February 4, 2022
Nike filed a lawsuit against StockX in the southern district of New York on Thursday, accusing the sneaker resale giant of using its trademarks without authorization to market and sell non-fungible tokens “at heavily inflated prices to unsuspecting consumers.” In the federal complaint, Nike says that by minting “Vault” NFTs based mostly on popular Nike sneakers, StockX is infringing upon and diluting its trademarks.
“Nike did not approve of or authorize StockX’s Nike-branded Vault NFTs,” the complaint reads. “Those unsanctioned products are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.”
Nike did not have a comment on the lawsuit, citing a policy against public statements on pending litigation. StockX did not respond to a request for comment.
Nike’s lawsuit echoes one frequent criticism of the StockX NFT program that arose in the wake of its debut in January. The complaint references how StockX’s terms around its NFTs allow it to redeem an NFT from its Vault program for an experiential component at its sole discretion, essentially taking it away from the holder.
It also calls into question the inflated prices of the StockX NFTs, pointing out that a fairly pedestrian sneaker like the black and white Nike Dunk Low is selling for an average of $282 on the site while the NFT version is selling for an average of $809.
The lawsuit draws from social media to establish that there is already confusion over the StockX NFTs, pointing to comments on Reddit and Twitter that question whether Nike is involved in the project.
The complaint filed by Nike describes NFTs as “part of the future of commerce.” It also warns that the burgeoning technology is susceptible to trademark infringers seeking to reap profits off intellectual property that does not belong to them.
Nike is heavily invested in the metaverse and recently established a new division called Nike Virtual Studios. In December 2021, Nike acquired NFT brand RTFKT, which will operate under the brand’s new Virtual Studios division going forward.
The lawsuit contains a teaser of what’s to come from the Nike-owned RTFTK, saying it plans to release virtual products from the brand in February.
Nike is asking that StockX be prohibited from selling or promoting its Vault NFTs that use Nike marks. It also wants the resell marketplace to destroy the NFTs and pay for damages suffered by Nike.
