Nike sues StockX over ‘unauthorised’ shoe NFTs
Nike has sued online reselling storefront StockX for listing non-fungible tokens (NFTs) of Nike-branded shoes without its permission.
StockX has minted NFTs that prominently feature Nike’s trademarks and has marketed them at “heavily inflated prices” to customers who “believe or are likely to believe” that the digital assets are authorised by the sneaker giant.
Billed as “100% Authentic Nike-branded Vault NFTs”, the assets appear as a digital recreation of Nike shoes, featuring trademarks used “without Nike’s consent”, Nike alleged in its complaint.
The e-commerce platform began selling its Vault NFTs in January 2022. Each one is associated with a unique physical product held by StockX until the NFT owner “redeems” the NFT in exchange for the shoe.
The NFTs have generally sold for “many multiples” above the price of their physical counterparts, Nike claims. Nike highlights StockX’s NFT of a 2022 Nike Dunk Low—which generally retails for $100 new—being sold for $3,500.
So far, StockX has sold more than 500 Nike-branded NFTs, Nike claims.
Nike also claims that consumers are “already questioning” whether Nike authorised StockX to sell its NFTs
“StockX’s misappropriation of Nike’s famous trademarks and goodwill to buoy its entry into the lucrative NFT and digital collectable market deprives Nike of its exclusive right to use its marks in connection with this new commercial medium.”
This suit comes shortly after Nike’s public acquisition of RTFKT, a digital art studio with a focus on NFTs. While Nike has yet to mint or market any branded NFTs of its own, it has said that it will release “a number of virtual products” later this month.
According to Nike, the StockX Vault NFTs could “jeopardise” Nike’s digital goods in the metaverse going forward.
“Unfortunately, novel product offerings, burgeoning technologies, and gold rush markets tend to create opportunities for third parties to capitalise on the goodwill of reputable brands and create confusion in the marketplace. NFTs are, not surprisingly, no exception to the rule.”
NFT knock-back
Following the introduction of NFTs into the public conscious last year, several projects have emerged that appear to infringe trademarks, designs, and copyrights of prominent artists and brands.
Last month, French Luxury brand Hermès sued artist Mason Rothschild for developing NFTs of the brand’s iconic ‘Birkin’ bags.
The lawsuit, filed at the US District Court for the Eastern District of New York says that Rothschild’s “Metabirkins” rip off Hermès’ trademark by simply attaching the prefix “meta”.
Currently, the legal rights attributable to NFTs are unclear, but wil likely be clarified with the upcoming wave of infringement lawsuits.
One such case likely to bear fruit is a lawsuit filed this week by rapper Lil Yachty, who sued an NFT startup for “maliciously” using his likeness in conjunction with an upcoming NFT product in order to secure millions of dollars in funding.
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