The Verge Reports…
Nike is suing an online marketplace for launching non-fungible tokens (NFTs) based on Nike shoes, testing the limits of crypto trademark law and what an NFT actually is.
StockX is a reseller for streetwear, bags, and sneakers, among other items. Unlike some marketplaces, it’s also an intermediary that takes in items and verifies their authenticity. StockX built on that system in January by launching NFTs linked with physical goods. The announcement promises these “Vault NFTs” can be redeemed for physical items but also traded instantly as digital goods.
The problem is that Nike shoes are extremely popular on StockX, and its Vault tokens are linked with the name and picture of their corresponding products. Nike alleges that the resulting crypto assets constitute trademark infringement, false designation of origin, and trademark dilution, among other violations. The case hinges on whether StockX’s NFTs are an extension of its normal reselling process (like a digital receipt of ownership) or whether they’re products in their own right, with potentially significant implications for NFTs in general.
In its lawsuit, which was filed February 3rd and previously covered by The Fashion Law, Nike notes that StockX has launched nine limited-edition Vault NFT series, and eight are linked with Nike shoes. It claims this has produced a collection of digital items that look like official Nike goods. “StockX almost exclusively used Nike’s marks to launch its Vault NFTs because it knew that doing so would garner attention, drive sales, and confuse consumers into believing that Nike collaborated with StockX on the Vault NFTs,” it says. “StockX is using Nike’s trademarks to market, promote, and attract potential purchasers.” StockX declined to comment on the lawsuit.
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