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7 June 2022Trademarks

StockX denies Nike counterfeit claims

Online reselling storefront StockX has defended its authorisation programme following accusations from Nike that it is selling counterfeit shoes.

In its submission filed yesterday, June 6, at the US District Court for the Southern District of New York, StockX called the counterfeit claims “meritless”, adding that the lawsuit is “nothing more than a baseless and misleading attempt to interfere with an innovative and efficient method to trade in current culture”.

StockX offers a stock market for products, allowing customers to buy and sell items at "their true market price".

In February, Nike claimed StockX was listing non-fungible tokens (NFTs) of Nike-branded shoes without its permission. According to the suit, these NFTs were being marketed at “heavily inflated prices” to customers who “believe or are likely to believe” that the digital assets are authorised by Nike.

Responding in April, StockX claimed that the NFTs are not virtual sneakers, but effectively a “claim ticket” that tracks proof of ownership but does not have any intrinsic value. Purchasers of an NFT to don’t have physical possession of the stored item, so the sneaker remains in the StockX Vault.

At the time, StockX had released NFTs associated with 28 different types of physical products, including sneakers, trading cards and collectibles.

Just one month later, Nike escalated the dispute by filing an updated complaint which alleged that StockX has also been marketing counterfeits of its footwear products.

Nike alleged that an investigation into the storefront’s conduct found that StockX has been and is currently dealing in counterfeit Nike goods.

Now, in response to the counterfeit claims, StockX has defended its own authentication process, which it said is a process in which all of the products on its platform are authenticated by human beings trained by StockX (with the help of a machine learning technology) before they are sent to a buyer.

“Since inception, StockX’s authenticators have inspected more than 30,000,000 products and prevented over $60,000,000 in counterfeit sneakers from reaching buyers on the platform,” said the response.

StockX’s process, which also includes investigation and refund/replacement where a customer reasonably suspects a purchased product is counterfeit, has reportedly been praised by consumers and industry participants, including Nike.

The response added: “Nike’s suggestion that StockX is a bad actor that intentionally deals in counterfeits and misleads its consumers is not only contradicted by the facts, but by Nike’s own dealings with StockX.”

StockX added that Nike had sought to collaborate and had invited the reseller to join an anti-counterfeiting counsel with the US Department of Homeland Security.

“Despite numerous opportunities to offer feedback or criticisms, at no time in the past did Nike express concerns to StockX about its authentication process. The motive behind Nike’s new-found litigation position is suspicious at best,” said StockX.

StockX has asked the court to dismiss the amended complaint in its entirety.

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More on this story

Trademarks
1 April 2022   Online reselling storefront StockX accused Nike of having a “fundamental misunderstanding” of how non-fungible tokens (NFTs) work, as it fired back at Nike’s trademark lawsuit against it.
Trademarks
12 May 2022   Nike has escalated its lawsuit against StockX centring on non-fungible tokens, alleging that the online reseller has also been marketing counterfeits of its footwear products.