Nike is suing online Detroit based reseller Stockx for using unauthorised images of Nike shoes in non-fungible tokens (“NFTS”). The case will be heard in the New York federal court.
An NFT is a non-interchangeable unit of data stored on a form of a digital ledger. The NFT can then be sold or traded. Each NFT represents various real-world objects such as photos, videos and music. Stockx, a resale marketplace, operates similar to popular e-commerce store eBay. Through Stockx, purchasers can buy and sell NFT’s which are associated with physical products. A purchaser can then redeem the NFT, receiving the real product in exchange for the NFT.
Stockx first began selling NFT’s back in January 2022. Stockx allegedly informed buyers they could redeem the tokens for the physical Nike shoes “in the near future.” Stockx are alleged to have sold over 500 unauthorised Nike branded NFT’s. The company is understood to be valued at over $3.8 billion (the equivalent to £2.8 billion).
Nike allege Stockx are selling NFT’s of Nike shoes at a much greater price than the original cost of the shoes. Nike complain this is not only infringing upon but also dilutes its trade marks. Nike are seeking an injunction to prohibit Stockx from selling and/or promoting Nike branded NFT’s. Nike are also seeking monetary damages.
This is not the first claim involving NFT’s, last month luxury brand Hermes issued legal proceedings against Mason Rothschild over NFT’s which resembled its own famous Birkin faux fur handbag. The cases will be the first in which a court is to determine the use of trade marks in NFT’s. It is to be seen in whose favour the court will rule.
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