Quick take:
- StockX maintains that it did not infringe on Nike’s copyright.
- The online streetwear reseller says its NFTs have no intrinsic value.
- StockX says Nike’s lawsuit “threatens the legitimate use of NFTs”.
In response to the lawsuit filed by Nike in February, online streetwear reseller StockX has hit back at the sportswear titan, saying that Nike shows a “fundamental misunderstanding” of NFTs, a Bloomberg report revealed.
Nike filed a federal complaint claiming that StockX’s NFTs of Nike-branded sneakers infringe on its trademark and dilute its brand. The NFTs are sold on a new service called Vault NFTs launched in January.
However, StockX argued that its NFTs aren’t virtual sneakers, but are instead e-commerce listings that represent the physical sneakers, which buyers can trade or sell while saving on shipping fees and storage space. While NFTs have become widely referred to as digital art, they are also digital smart contracts that authenticate ownership of digital or physical assets.
“Using NFTs in this manner is lawful and violates no legitimate right of Nike or any of the manufacturers of the underlying goods,” StockX said in the filing, according to Bloomberg. “Nike’s claims lack merit, disregard settled doctrines of trademark law, including the doctrines of first sale and nominative fair use.”
NFT trademarks applications surged more than 500% from Aug 2021 to Jan 2022. As metaverse trademark wars heat up, a growing number of brands and corporations have rushed to register trademark applications in the metaverse. Just this month alone, Amex, Meta, GameStop, Paris Saint-Germain, and Versace are amongst some of the world’s most recognisable names to have filed metaverse trademarks.
Following the lawsuit with StockX, Nike filed a series of new trademarks for its virtual sneaker studio, RTFKT, in February. The trademarks cover virtual footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment and more.
StockX’s Vault lists not just Nike NFTs, but also NFTs from brands like Adidas and Puma. Adidas has launched its own metaverse project while Puma filed a trademark in January for virtual goods. However, neither of these two brands are suing StockX so far.
As reported by Bloomberg, StockX said in its filing that “Nike’s suit threatens the legitimate use of NFTs not just by StockX, but by other innovators that also use NFTs to track title to physical goods held in a vault, such as fine art, whiskey, and wine.”
Bloomberg reported on Jan 12 that StockX is planning to go public in the first half of this year following a pandemic-induced boom in the collectibles market. The company revealed its valuation of $3.8 billion in Apr 2021 after a secondary tender offering.
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