Nike Accuses StockX of Illicit Sale of Sneakers NFTs
NFTs are definitely a fun thing to play around with, and also a very profitable one, especially if they are somehow associated with famous brands. But there could be legal consequences for trademark infringement, even in the metaworld.
Table of contents:
- Nike sued StockX over an unauthorized sale of NFTs.
- Overpriced and undermining the reputation.
Nike sued StockX over an unauthorized sale of NFTs
Like all global corporations, Nike was a participant in many lawsuits over the past decade, some being filed against the company, like the one in 2018, where the manufacturer of sports shoes and apparel was accused of gender discrimination; others, such as the one in question, initiated by the business giant itself to protect its intellectual property.
In the lawsuit that was filed to New York Federal Court, Nike accuses the US-based online reseller, which also has a brick-and-mortar shop in Hong Kong, of illegal use of its trademarks in as many as 500 non-fungible tokens that might have misled the buyers into thinking that they were obtaining the tokens based on original products. In its appeal to the federal court, Nike also claimed that StockX was actually guaranteeing that the physical version of each pair of sneakers embedded in NFTs could be redeemed in brick-and-mortar stores at some point in the future. As per the lawsuit, Nike demanded an undisclosed monetary compensation along with a complete halt of all sales of said NFTs and any items on StockX associated with the sports brand. It’s likely that the compensation claim amounts to a few hundred million dollars which StockX could easily cover given that its valuation is reported at $3.8 billion, though it would ensue significant reputational losses.
Overpriced and undermining the reputation
Apart from that, the corporation accused StockX of shady business practices since the platform was selling the tokens at “inflated prices and murky terms of purchase and ownership” which could have struck buyers as suspicious and thus inflicted damage to Nike’s reputation. But despite the fact that the lawsuit had already been filed, the NFT collection dubbed “The Vault” has been live on the platform for quite some time, offering nine tokenized sneakers at a price of around $800, which is inflated indeed.
Upon filing the lawsuit, Nike released the statement where it recognized the importance of non-fungible tokens as a means of interaction with consumers and keeping abreast with technological progress, but also bashed dirty-playing market participants, obviously hinting at StockX, for attempting to “usurp the goodwill” of some of the biggest brands in the world and undermining the image of such an advanced tech solution as NFTs. Lastly, the corporation announced that it is set to release its proprietary NFT collection in collaboration with the digital art studio RTFKT that the sports corporation acquired at the tail end of last year.