Nike Is Suing Digital Streetwear Reselling Marketplace StockX for Selling Digital Merchandise Bearing Nike’s Trademarks
Sportswear giant Nike has filed a lawsuit against digital streetwear and sneaker reselling marketplace StockX, claiming that StockX infringed upon Nike’s trademark by selling digital versions of Nike goods without the brand’s approval. Nike claims that StockX sold Nike-branded NFTs that did not originate from Nike during a mid-January drop, using the company’s branding to sell digital assets at higher prices than the physical item which the NFT represents.
The lawsuit – which marks the latest in a series of new legal battles following the explosion of NFTs, the metaverse, and their ramifications for “intellectual property” – was filed on February 3rd in the southern district court of New York. A statement from Nike read, “Without Nike’s authorization or approval, StockX is ‘minting’ NFTs that prominently use Nike’s trademarks, marketing those NFTs using Nike’s goodwill, and selling those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to believe that those ‘investible digital assets’ (as StockX calls them) are, in fact, authorized by Nike when they are not.” StockX has not yet publicly commented on the suit.
Though Nike has not yet minted NFTs, it was one of the first brands to file trademark applications for its virtual goods, doing so in October of 2021. The brand is planning to release “a number of virtual products” later in February with digital art studio Rtfkt (which it acquired in late December), the suit also said.
Picking up on the frequent intersection between sneakerheads and NFT collectors – which reflects trends in the collectible marketplace in general – StockX launched Vault in mid-January as its first NFT project, allowing customers to buy and sell digital sneakers that serve to certify ownership of the corresponding physical item. The NFTs can be exchanged for their IRL counterpart at any time, though the NFT often sells for significantly more than the physical item. The sneaker reseller filed a trademark for its digital goods on January 5th.
StockX’s NFTs function not only as traceable digital receipts, but also as promotional marketing tools that allow customers exclusive access to platforms and experiences including StockX releases, promotions, and events. Thus, Nike is claiming that StockX is not only selling products bearing Nike’s trademarks, but using these trademarks to market other items and services.
Nike’s lawsuit requests that StockX cease and destroy all NFTs associated with Nike’s trademarks and pay for damages that Nike suffered.