June 27, 2022

Nike Sues StockX Over Latest NFTs

3 min read

It’s been less than a month since we first covered online sneakerhead and hypebeast cultural hub StockX and their first official foray into NFTs, with the ‘‘ StockX Vault.’ In an effort to seemingly tokenize their physical possessions, StockX sought a new way to acknowledge ownership – – but what that truly means and how StockX would completely implement it? Those questions still have some much-needed clearness that needs to be brought to the surface.

Prior to that can occur, however, StockX will face more uphill battles, as leading apparel company Nike is filling a suit against the platform for unauthorized trademark use.

StockX, Nike, & The Unique Case Of NFT Trademark Usage Given how early in the days of NFTs we in fact are, there’s little to no precedent when it comes to how the courts will view trademark combination and use when it concerns NFTs. Nevertheless, here’s what we do know about the most recent claim in this area … A Federal claim centered on brand dilution: Nike filed the match today in the southern district of New York, claiming that the Vault program uses Nike trademarks without approval. The complaint reads:

“Nike did not authorize of or license StockX’s Nike-branded Vault NFTs. Those unsanctioned products are most likely to confuse customers, create an incorrect association in between those items and Nike, and dilute Nike’s well-known trademarks.”

  • Nike’s problems reproduce a typical critic’s POV: StockX critics in the early days of the Vault program have expressed much ridicule around the degree of centralization within the ‘‘ Vault.’The platform’s TOS state that an NFT in the Vault program can basically be redeemed from the owner’s hands at any time for an “experiential element” at the platform’s sole discretion. Does not sound congruent with the elements of true ownership we usually associate with NFTs.

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 Polygon continues to discover itself as a prime NFT alternative for major brand names and business that are looking for ownable NFT experiences for customers.|Source: NYSE: NKE on TradingView.com

Lack Of Precedent While the claim might likely land with some sort of settlement, it’s worth noting that there’s still lots of concerns to be answered around IP use when it concerns NFTs.

In recent weeks, we’ve been keeping a close eye on the ongoing battle with style home Hermes and NFT designer and ‘‘ MetaBirkins’ developer Mason Rothschild. The style brand name previously sent out a cease-and-desist to Rothschild over his popular NFT series, to which Rothschild publicly decreased the invitation to cut ties with the project. In the latest development, Hermes has actually elected to take legal action against Rothschild. The case is widely being thought about as one that could set the precedent for NFT IP usage for the years to come.

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Included image from Pexels, Charts from TradingView.com The writer of this material is not associated or affiliated with any of the parties discussed in this short article. This is not financial guidance.