Nike Brings NFT Trademark Lawsuit
On February 3, Nike sued online reseller StockX in the United States District Court for the Southern District of New York alleging trademark infringement, trademark dilution, false designation of origin/unfair competition, and other claims under New York state law. A copy of the complaint is here.
As alleged in the lawsuit, StockX is an online resale platform for various brands of sneakers, apparel and other collectible goods that acts as an intermediary for users who buy and sell items from each other on StockX’s platform.
According to Nike, StockX allegedly minted a collection of NFTs that prominently display Nike’s trademark on a sneaker and then sold the NFTs without Nike’s authorization or approval.
StockX claims that the Nike branded NFTs merely certify ownership of a corresponding physical Nike sneaker in lieu of actual possession of the sneaker itself (which is held by StockX). According to StockX, NFT owners may redeem their NFTs for the actual sneakers or trade them as digital goods.
However, Nike claims that unlike the other physical goods that may be sold on StockX’s platform—which are manufactured and/or distributed in the first instance by other brands like Nike or their authorized distributors—StockX’s NFTs are virtual products that are first created and offered for sale by StockX. Nike also claims that StockX has sold the NFTs at prices that are well above the price of the corresponding physical Nike sneakers sold on Nike.com and elsewhere.
According to Nike, StockX’s promotion and sale of the NFTs has explicitly misled consumers into believing that Nike has authorized, approved and/or sponsored the NFTs and that StockX is using Nike’s trademarks to promote its own products and services.
The trademark dispute raises interesting legal questions, such as whether the NFTs are considered a part of the normal resale process, as StockX claims, or whether the NFTs are new products entirely, as claimed by Nike.
The suit is one among several NFT copyright/trademark suits filed during the ongoing NFT boom, with suits recently brought by Miramax, Hermes and Roc-A-Fella.
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