Yusuf is an aspiring Journalist and Health law expert with a special focus on technology innovations. He is a guest writer at Qwenu and Deputy Editor-in-chief of Gamji Press.
On Thursday, the athletics giant Nike, filed a lawsuit in the Southern District of New York, accusing StockX of exploiting its trademarks without permission to market and sell non-fungible tokens “at grossly inflated prices to naïve consumers.”
The athletics giant claims that StockX is infringing on and diluting its trademarks by minting “Vault” NFTs based largely on popular Nike footwear, according to the federal complaint.
According to the complaint, “Nike did not approve or authorize StockX’s Nike-branded Vault NFTs.”
“Those unapproved products are likely to mislead consumers, create a misleading relationship between them and Nike, and weaken Nike’s well-known trademarks.” The complaint reads.
Nike’s lawsuit reflects one of the most common criticisms of the StockX NFT program since its launch in January. StockX’s rules around its NFTs allow it to redeem an NFT from its Vault program for an experience component at its exclusive discretion, effectively taking it away from the holder.
It also calls into question the StockX NFTs’ exorbitant prices, pointing out that a common sneaker like the black and white Nike Dunk Low sells for an average of $282 on the site, while the NFT counterpart sells for an average of $809.
The lawsuit uses social media to show that there is already a misunderstanding about the StockX NFTs, citing comments on Reddit and Twitter asking if Nike is engaged in the initiative.
NFTs are described as “part of the future of trade” in Nike’s complaint. It also warns that trademark infringers may target the emerging technology in order to profit from intellectual property that does not belong to them.
Nike has lately formed a new branch named Nike Virtual Studios, which is highly invested in the metaverse. Nike purchased NFT brand RTFKT in December 2021, and it will now operate under the brand’s new Virtual Studios division.
The lawsuit includes a teaser of what’s to come from RTFTK, which is owned by Nike and promises to offer virtual merchandise in February.
The athletics giant is hereby seeking the order of the court for a ban on StockX selling or promoting their Vault NFTs with Nike logos. It also wants the resell marketplace to destroy the NFTs and compensate Nike for the losses it has incurred.
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