In January this year, StockX (an online trainer reseller) launched "Vault NFTs". The NFTs, depicted by Nike shoe imagery, can be traded digitally or redeemed for the corresponding physical trainers. The NFTs also gave customers access to experiences such as releases, promotions and events.
Nike has since filed a claim against StockX for trademark infringement, stating that StockX was selling NFTs of images of Nike trainers without Nike's permission, alleging that this infringed its trademarks and caused customer confusion. Nike claimed that StockX was "blatantly freeriding" on "the back of Nike's famous trademarks and associated goodwill".
StockX responded to the claim on 31 March, calling Nike's lawsuit "baseless and misleading". StockX said that its NFTs are merely "tickets" to depict proof of ownership of physical trainers stored in its vault and are "absolutely not virtual products or digital sneakers" as Nike claimed.
StockX claims that it was only using NFTs to authenticate its physical shoes and was not selling them as standalone products. It explained that the NFTs essentially made it easier to trade the trainers stored in the vault. StockX believe the Vault NFTs save customers "time and money while reducing the environmental impact of repeated shipping".
The response from StockX raises interesting questions over how NFTs are classified - whether that be as a (1) ticket to depict ownership, or (2) a digital asset in their own right. How the Court decides to deal with this case could have significant implications, particularly for those who use NFTs to record ownership of assets (such as fine art).
In Vogue Business, Jeff Trexler of the Fashion Law Institute comments, "Is the NFT just, as StockX claims, a means of identifying a product, or is it a product with value in itself? Is it a name or photo in an ad or is it, as the response brief indicates, a use that adds value by assuring a purchaser that the goods are authentic? Would the analysis be different if StockX were just selling the product with a mention of the NFT rather than featuring the NFTs?".
Since there is little precedent in the world of NFT litigation, we are tracking the key developments. Each month we publish a roundup of the key NFT disputes to be aware of. Our March roundup and February roundup can be found using the links below.
March NFT Litigation Roundup: Jay-Z, Bored Ape, Caked Apes and more…
February NFT Litigation Roundup: Art Wars, Hermes "MetaBirkins", and more…