On thursday, Nike sued StockX in a southern district of New York for selling its trademark in a virtual world as NFTs without authorization from the label. The sneaker resale giant used Nike trademarks to sell non-fungible tokens.
The complaint reads,
“Nike did not approve of or authorize 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.”
In the complaint, Nike also said that StockX is diluting and infringing its trademarks by minting vault non-fungible tokens, which were based on the most popular Nike sneakers.
Nike x StockX NFTs drama explained
Nike has claimed that StockX began selling NFTs last month of the brand's sneakers. StockX said that they would be able to redeem these NFTs to buy physical versions of the shoes in the near future.
The complaint also stated that StockX has already sold more than 500 Nike NFTs and the customers are doubting the legitimacy of the Nike brand itself. This seems to be hurting the brand's reputation and destroying their market value.
Nike already plans to release the non-fungible tokens themselves later this month in a partnership with digital art studio RTFKT, which the brand acquired in December 2021.
One example which has led us to believe Nike's claims is the image of KAWS Sacai Nike Blazer Low Blue (Vault NFT) which is available on StockX for $549 USD.
The StockX site has a tag on their website which explains how these Vault NFTs work. StockX's website states,
"Each Vault NFT is backed by a physical item held in StockX's custody, tied directly one-to-one via the blockchain,".., "This means that if you buy an edition of a Vault NFT, you are the owner of the corresponding physical good which secured and stored in StockX's Vault."
The complaint also calls a question on the highly inflated prices, giving an example of, a Black and White Nike Dunk Low is retailed at a price of $282 USD at the store while the NFT version on StockX is selling these sneakers for $809 USD.
The lawsuit also gives us an insight into what Nike Virtual Studios is planning to come up with in February 2022. Nike is demanding that the StockX be prohibited from selling Nike non-fungible tokens and pay for damages suffered by the brand.
The NFTs have recently become very popular, and lawsuits surrounding these non-fungible tokens have been coming up in U.S. courts. Last month Hermes sued Mason Rothschild over MetaBirkin inspired by the company's Birkin bags.
Miramax also sued director Quentin Tarantino over the auction of non-fungible tokens inspired by the 1994 film Pulp Fiction, which he directed and the studio distributed.
What are your thoughts about this issue?