The company added that StockX has sold almost 500 NFT sneakers with their branding, denting their global reputation and confusing its consumers.
Sneaker giant Nike has filed a lawsuit against sneaker retail brand StockX for marketing and selling unauthorized images of Nike shoes as non-fungible tokens (NFTs). According to the lawsuit filed in the southern district of New York on Thursday, Nike accused StockX of infringing on and diluting its trademarks by minting “Vault” NFTs based largely on popular Nike footwear, and selling them at “heavily inflated prices, with very murky terms of purchase and ownership to unsuspecting consumers.”
“Nike did not approve of or authorize StockX’s Nike-branded Vault NFTs,” the 50-page complaint stated. “Those unsanctioned products are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.”
The company added that StockX has sold almost 500 NFT sneakers with their branding, denting their global reputation and confusing its consumers.
StockX is a Detroit-based online reselling platform for sneakers, handbags, and other dress accessories. The popular online reseller reportedly started selling Nike sneaker NFTs in January, naming its collection “The Vault”, which comprises 9 premium Nike sneakers and deals with NFTs tied to their real-world asset.
The complaint filed by Nike also revealed that StockX reportedly promised its customers that they can redeem the physical version of the sneakers for the tokens in the near future. StockX was valued at more than $3.8 billion last year. Any attempt for comment from Stockx proved futile.
Nike, also refused to comment on the lawsuit, citing a policy against public statements on pending litigation. The apparel company, however, is seeking an undisclosed amount in damages and a halt of sales on such virtual collectibles.
NFTs, according to Nike, NFTs are “part of the future of commerce” and a way for brands to interact with their customers, but some market participants are attempting to “usurp the goodwill of some of the world’s most famous trademarks and use those trademarks without authorization to market their virtual products and generate ill-gotten profits.”
The company also warns that trademark infringers may target the emerging technology to profit from intellectual property that does not belong to them.
The lawsuit cited several scenarios on social media to establish that there is already a lot of doubt about the StockX NFTs, citing comments on Reddit and Twitter asking if Nike is engaged in the initiative.
Nike also highlighted StockX NFTs’ exorbitant prices, pointing out that a common sneaker like the black and white Nike Dunk Low, which sells for an average of $282 on the site, is now selling for an average of $809 as an NFT.
Nike is not new to the metaverse as the company recently created a new division called ‘Nike Virtual Studios.’ The company is set to release its own virtual products this year, which will operate under NFT brand RTFKT, which it acquired in the latter stages of last year.
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