The US-based multinational corporation, Nike, has recently filed a Trademark Infringement lawsuit over unauthorized Non-Fungible Tokens (NFTs) against StockX in a federal court in New York.
StockX is an online reselling platform based in Detroit. It is engaged in reselling handbags, sneakers, and other goods. Last year in April, StockX raised $255m in funding, resulting in the company valuing at $3.8bn.
Headquartered near Beaverton, Oregon, in the Portland metropolitan area, Nike is engaged in the designing, development, manufacturing, and global sales and marketing of sports apparel, footwear, equipment, accessories, and other services.
The sportswear giant has alleged that StockX has begun selling new virtual products by using Nike’s trademarks without obtaining its permission. According to Nike, StockX has sold even more than 500 Nike-branded Vault NFTs so far.
In this matter, Nike has filed a 50-page lawsuit against StockX alleging trademark infringement with the US District Court for the Southern District of New York.
In its complaint filed, Nike has asserted that StockX is ‘minting’ NFTs that prominently use trademarks owned by Nike without its authorization or approval. The sportswear giant has further mentioned that StockX is even involved in marketing those NFTs by using Nike’s goodwill and selling them at heavily inflated prices to unsuspecting customers who believe or are most likely to believe that such ‘investible digital assets’ (as referred to by StockX) are authorized by Nike when in reality they are not.
As per Nike, it has never approved or authorized Nike-branded Vault NFTs sold and marketed by StockX. The sportswear giant strongly believes that such unsanctioned products are very much likely to mislead the customers, create a fake association between such products and Nike, and dilute Nike’s widely-recognized trademarks. It mentioned that the unapproved and unauthorized branding of Vault NFTs with Nike trademarks would jeopardize the capacity of Nike’s widely-known Registered Trademarks to identify its own set of digital goods in the metaverse and beyond and even affect its overall reputation through an association with inferior digital products.
Nike has written in its lawsuit that despite recognizing firsthand the enormous value of its brands, StockX chose to compete in the NFT market by not taking the time to create or establish its Intellectual Property Rights (IPRs), but instead by conspicuously freeriding, that too almost exclusively, on the back of Nike’s widely-known trademarks and their associated goodwill.
Nike also mentioned that use of its trademarks by StockX to enter the digital collectible market prevents the sportswear giant of its exclusive right to use its registered trademarks within the medium.
In this case, StockX has replied by saying it has never stated or implied that the NFTs are tied, associated with, sponsored by, or officially connected to a third-party brand. StockX is confident that its customers understand the difference between its Vault NFTs and the third-party products to which they correspond.
Katy Cockrel, the Vice President of Communications at StockX, has said that StockX customers have been trading a wide range of products on the StockX website, thereby trusting the platform to verify their authenticity and shipping products back and forth in each trade.
As part of its lawsuit, Nike has requested damages and that the court in its judgment would stop StockX from selling NFTs possessing Nike’s trademarks.
Nike filed this lawsuit against StockX after purchasing RTFKT Studios (an apparel and footwear startup based on NFTs) for an undisclosed sum in December.
RTFKT Studios specializes in creating virtual sneaker designs, memes, and many other collectible exclusives inspired by video games.
According to several reports, the sportswear giant has plans to launch various virtual products later this month. For more visit: https://www.trademarkmaldives.com
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