Nike sues StockX for selling fake NFTs of its sneakers
Where there is money, there is a lawsuit. Nike has sued online NFT reseller StockX for selling unauthorised images of Nike shoes as NFTs. The case was registered in New York's southern district federal court on February 3. The lawsuit has asked for unspecified money damages that Nike has endured and an order blocking StockX's sales.
WHAT HAPPENED: Nike claims that StockX began selling false NFTs of its sneakers in January, and has been infringing its trademark to make sales. The company also claims that StockX has been telling customers that they would be able to 'redeem' their NFT tokens to buy the shoes in the physical world in the near future.
The lawsuit specifies that about 500 such false NFTs have been sold and that StockX's inflated prices and questionable terms of purchase are causing buyers to have doubts, which is harming the company's reputation.
On the StockX webpage, a black-and-white Nike Dunk Low is selling for about US $280.
The NFT version of the same sneakers is selling for about US $570. StockX's NFT webpage also says that the NFTs are 100% authentic.
The federal complaint lodged in New York reads, "Nike did not approve of or authorise StockX’s Nike-branded Vault NFTs. Those unsanctioned products are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks."
StockX is a Detroit-based platform known to resell sneakers and handbags. As of 2021, the company was valued at US $3.8 billion. StockX began its Vault NFTs in January 2022.
NOT THE FIRST TIME: Multiple lawsuits have been lodged over the distribution of NFTs by companies in the fashion industry. Back in January, luxury retail brand Hermès sued American digital artist Mason Rothschild for the creation of MetaBirkin NFTs. In the lawsuit, Hermès accused Mason of using the company's patented Birkin bags for profit without authorisation. Hermès owns the US trademark of the word 'Birkin'.
Mason had essentially created digital artwork inspired by Birkin bags and named it MetaBirkin. He then began to sell the art as NFTs. As per The National Law Review (NLR), Hermès International and Hermès of Paris filed the lawsuit in the southern district of New York's federal court, which is the same court Nike has lodged its lawsuit in. The Hermès lawsuit is also the same as what Nike has lodged against StockX: trademark infringement and dilution.
Although both Nike and StockX have denied to make a statement, Mason did release one of his own. He said that he would not apologise for the his art and that based on the First Amendment of the US Constitution, he has the right to create art based on his interpretations of the world around him.
Nike has already ventured into the world of NFTs. The apparel giant is all set to release numerous virtual products later in February and has already set up a division known as Nike Virtual Studios. In December 2021, Nike bought an NFT brand known as RTFKT and will be releasing the virtual products in collabaration with them.