Nike Attacks StockX In An NFT Lawsuit For Trademark Infringement And Dilution

Nike notes that the new frontier of NFTs has 'swiftly become a virtual playground for infringers to usurp the goodwill of some of the most famous trademarks in the world.'

NFT ( Non-Fungible Token ) text in a torn dollar billFirst, Hermès filed suit against the creator of a “METABIRKINS” non-fungible tokens (NFT) project. Now, Nike has filed a complaint against StockX, the operator of an online resale platform for various brands of shoes and apparel, based on its alleged unauthorized and infringing use of Nike’s famous marks in connection with its new NFT marketplace. The intellectual property lawsuits concerning the marketing and sale of NFTs are just starting to be drafted and it is likely that there are many more coming down the pipeline.

Nike, in its complaint filed in the U.S. District Court for the Southern District of New York, notes that the new frontier of NFTs has “swiftly become a virtual playground for infringers to usurp the goodwill of some of the most famous trademarks in the world and use those trademarks without authorization to market their virtual products and generate ill-gotten profits.” It takes issue with what it believes to be an intentional plan by StockX, which was valued at $3.8 billion in 2021, to blatantly freeride on the back of Nike’s trademarks and associated goodwill.

The NFTs that StockX sells on its website are primarily digital images of popularized and often rare Nike sneakers that individuals can purchase and store in a digital wallet as collectibles. Nike believes that consumers are likely to be confused as to whether Nike has authorized the sale of these NFTs or is affiliated with their creation, and attaches some proof to show actual confusion in its complaint. Yet, Nike has had absolutely nothing to do with the NFTs sold on StockX’s marketplace and has earned no royalties from the sales of the NFTs.

For instance, on January 19, a Reddit user on a thread under the r/Sneakers subreddit asked, “How do they get the licensing to sell NFTs with nike branding?” A user replied, “This is the real question right here. Especially since Nike is jumping into this themselves. By StockX logic I could do the exact same thing. Just sell NFTs of stuff I’ve got in the collection.” Another user wrote, “You can cash out the nft for the actual shoe but I think it’s just a stupid scam for Nike to make money.” Nike will hang on to that statement to show that the StockX marketplace, which it has nothing to do with, is harming Nike’s reputation and goodwill.

Furthermore, as stated by one of the Reddit users, Nike recently acquired RTFKT, which creates next-generation collectibles that merge culture and gaming. Nike clearly has plans to play in this space and has even filed trademark applications with the U.S. Patent and Trademark Office to cover the sale of virtual goods. The brand is seeking monetary damages as well as injunctive relief to cause StockX to immediately stop selling its NFTs that bear Nike’s marks.


Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Attorney Needs to Know, published by the American Bar Association, and is an adjunct professor at the University of Florida Levin College of Law. You can reach him by email at heitner@gmail.com and follow him on Twitter at @DarrenHeitner.

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