Nike sues StockX over NFTs

Nike sued StockX for selling NFTs of Nike sneakers in the U.S District Court of New York, saying the online reseller infringed trademark laws by confusing their customers and interfered with Nike’s NFT plans.

In the lawsuit, Nike states that StockX has launched nine limited-edition Vault NFT series and eight that use Nike’s trademarks. The NFTs allow people to trade or hold sneakers without possessing them. Holders can redeem it at a time they choose.

The sneaker giant alleges that “StockX almost exclusively used Nike’s marks to launch its Vault NFTs because it knew that doing so would garner attention, drive sales, and confuse consumers into believing that Nike collaborated with StockX on the Vault NFTs.” It adds that StockX is selling the NFTs with Nike’s trademarks at “heavily inflated prices”.

Nike also asked for compensation for the damages that StockX has made to its brand reputation and NFT plans. It also requested StockX to stop selling NFTs with Nike’s trademarks.

It criticized StockX for using Nike’s trademark to enter the NFT market “not by taking the time to develop its own intellectual property rights, but rather by blatantly freeriding, almost exclusively, on the back of Nike’s famous trademarks and associated goodwill,” in its lawsuit. And that StockX’s actions have taken away Nike’s exclusive rights to use its trademark to enter the NFT marketplace.

Nike had plans to launch its own NFTs with a release of “a number of virtual products” this month with digital art studio Rtfkt.

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StockX filed its own lawsuit to counter Nike’s, stating that its NFTs are "no different than major e-commerce retailers and marketplaces who use images and descriptions of products to sell physical sneakers and other goods, which consumers see (and are not confused by) every single day." And that Nike’s allegations lack merit and show a misunderstanding of NFTs and trademark laws.

Katy Cockrel, vice president of StockX emphasized that its Vault NFTs brings value to the industry by providing its “customers with an exciting new, faster, cheaper and more efficient trading experience”.

She adds that the NFTs serve as safe and secure “claim tickets” for customers to “buy and sell in the digital secondary market without costs, delays and risks that can be associated with physically shipping goods upon each trade.”

Further, “NFTs provide safe and secure access for our customers to buy and sell in the digital secondary market without costs, delays and risks that can be associated with physically shipping goods upon each trade.”

Photo: Complex