StockX strikes back at Nike in NFT lawsuit

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The Nike swoosh logo is seen outside the store on 5th Avenue in New York City, New York, U.S., March 19, 2019. REUTERS/Carlo Allegri

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  • Nike said NFT images of its shoes infringe its trademarks
  • StockX said it only uses NFTs to track sneaker ownership

(Reuters) – Online retailer StockX LLC said in a court filing on Thursday that images of Nike sneakers it sells as non-fungible tokens do not infringe the trademarks of Nike Inc, arguing that Nike showed a “fundamental misunderstanding” of NFTs in suing StockX last month.

StockX in the Manhattan federal court filing called Nike’s lawsuit a “baseless and misleading” attempt to interfere with the popular secondary market for its sneakers. He said he only uses NFTs to authenticate his physical shoes and does not sell them as standalone products.

Digital assets called NFTs have recently exploded in popularity and intellectual property lawsuits over them have started hitting US courts, including disputes involving Miramax and Quentin Tarantino, Hermes and rapper Lil Yachty.

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Nike sued StockX in February for selling NFT images of Nike sneakers without the footwear giant’s permission, arguing they infringed its trademarks by confusing consumers. The lawsuit also said StockX’s NFTs interfered with Nike’s own NFT plans.

StockX countered in its response to the lawsuit on Thursday that its use of NFTs was “no different from major retailers and e-commerce marketplaces that use product images and descriptions to sell physical sneakers and other goods, than consumers see (and are not confused by) every day.”

According to StockX, its NFTs are simply “claim tickets” to access physical shoes stored in a “safe” after a buyer purchases them, and provide proof of ownership and authenticity.

StockX said the tokens facilitate the exchange of shoes stored in the vault and that NFTs are “definitely not ‘virtual goods’ or digital sneakers,” as claimed by Nike.

NFTs aren’t likely to confuse because StockX makes it clear to buyers that they relate to physical shoe tracking, StockX said. He said Nike’s lawsuit threatens others who use NFTs to track ownership of physical assets like fine art, whiskey and wine.

Nike and one of its attorneys did not immediately respond to a request for comment.

The case is Nike Inc v. StockX LLC, US District Court for the Southern District of New York, No. 1:22-cv-00983.

For Nike: Tamar Duvdevani of DLA Piper

For StockX: Megan Bannigan of Debevoise & Plimpton, David Mayberry of Kilpatrick Townsend & Stockton

Read more:

Nike Cries Virtual Shoe Scandal, Sues Retailer That Sells NFT Sneakers

Miramax sues Quentin Tarantino for NFT “Pulp Fiction”

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Blake Brittain

Washington-based correspondent covering court cases, trends and other developments in intellectual property law, including patents, trademarks, copyrights and trade secrets. Previous experience at Bloomberg Law, Thomson Reuters Practical Law and work as a lawyer.

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