Nike and StockX Lawsuit
Companies who sell apparel see a lot of opportunity in the NFT space. In December, Nike got involved with NFTs by acquiring virtual shoe creator RTFKT (pronounced artifact). In January, a company called StockX also got involved with NFTs. StockX is an online marketplace to buy limited edition clothes and sneakers. The company launched “Vault NFTs,” NFTs that can be redeemed for physical items like Nike shoes and traded as a digital good. After launching their vault NFTs StockX got hit with a lawsuit from Nike.
Nike is suing StockX for creating NFTs based on Nike sneakers, pushing the boundaries of crypto trademark laws and defining what an NFT is. Their sneakers are incredibly popular on StockX, and the vault NFTs are tied to the name and image of the Nike shoes they represent. Nike alleges the NFTs violate trademark law, including trademark infringement, trademark dilution, and more violations.
According to Nike’s complaint, StockX has released nine limited-edition Vault NFT series, eight of which are linked to Nike sneakers. It says that as a result, a collection of digital goods that resemble authentic Nike products has been created. The lawsuit says “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.”
Many NFT debates center on charges of copyright infringement, such as projects based on an artist’s work without their permission. In certain cases, like the lawsuit over Quentin Tarantino’s Pulp Fiction NFTs, an artist and publisher argue over who owns the rights. Who do you think will win the lawsuit–Nike or StockX?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.