Nike chase rival to dominate Metaverse sneakers
Nike (NKE) – Get the Class B report from NIKE, Inc. does not intend to share the poster with its competitors of the metaverse, the latest buzzword in the world of tech.
The brand, which recruits talent to boost and strengthen its image in this virtual world, has just issued a scathing warning to those who still doubted it: the company will not hesitate to bend over backwards for anyone who threatens its position. StockX, the Detroit-based sneaker exchange just found out the hard way.
Nike has filed a lawsuit against the sneaker exchange which it accuses of infringing its patents by marketing non-fungible tokens (NFTs) of its sneakers. The company claims that StockX is selling unauthorized images of its shoes as NFTs.
Nike also claims in its complaint that StockX offers a range of products that may confuse consumers.
“StockX’s use of Nike trademarks and images of Nike products to promote its NFT Vaults has already caused confusion in the market as to the source of the NFT Vaults and whether Nike is involved or associated in any way. to StockX’s NFT Vault”, accused the company in its lawsuit. “For example, immediately after StockX announced the release of the NFT Vault on January 18, 2022, social media users questioned ownership of StockX’s NFT Vault and whether Nike is ‘in it too,’ while others” feel safe assuming Nike gets a reduction in the fees StockX takes on every transaction.
Is StockX misleading consumers?
The problem here is the fact that, last month, StockX pioneered the concept of Vault NFT around the combination of physical products and NFTs. The collection links a digital token that users can exchange with each other on real sneakers: users can buy NFTs of popular collection sneakers that are backed by a pair of physical shoes. Owners can then redeem their NFTs for a physical pair of sneakers if they wish.
“So if you’re bullish on a shoe, consider investing in a Vault NFT. You take ownership of the NFT immediately after the trade ends, which means it’s the fastest way to return. And without shipping costs, and market-leading low selling costs at a fraction of the cost, there are fewer barriers to profitability”, StockX Explain when he launched the product.
But Nike doesn’t have it.
“To date, based on information and belief, StockX has sold 558 individual Nike-branded NFT Vaults,” Nike said. wrote in his trial. “Since StockX is not an authorized Nike retailer, to the extent that matching physical Nike shoes exist in StockX’s ‘vault’ facility, it is unknown where or how StockX acquired so many pairs of Nike shoes. “, lambasted the company.
Added: “StockX also presents each NFT Vault as “100% Authentic”, which, based on information and belief, is intended to explicitly mislead consumers that Nike has authorized, endorsed, sponsored and /or endorsed StockX’s NFT Vault.”
Nike has its own virtual sneaker company
StockX is built on the mechanics of the stock market to provide buyers with seamless access to in-demand products. The company, a mainstay of online fashion and the latest sports and street trends, has indicated that the physical items trading on its platform are part of a new alternative asset class that can be uniquely associated with NFT. Each edition of Vault NFT is uniquely serialized for a product authenticated as a title deed.
This is the principle that Nike is attacking, which recently acquired RTFKT, a company specializing in the manufacture of virtual sneakers.
The “Vault NFT is simply meant to function as a ‘digital receipt’ for a physical Nike shoe, there is no legitimate reason for StockX to prominently feature Nike trademarks on the Vault NFT and the StockX product page. This is because when a consumer purchases Nike shoes from the StockX marketplace, the consumer receives a paper receipt from StockX in the package.Unlike a Vault NFT, after information and belief, this paper receipt prominently uses StockX’s own brand and only uses the Nike name in connection with the purchased shoe, but still manages to function as a receipt for that Nike shoe.”
Therefore, Nike is asking the court for “an order requiring StockX to deliver to Nike for destruction all NFT Vault, associated footwear, digital files, packaging, printed graphics, promotional materials, business cards, signs, labels, advertisements, pamphlets, flyers and any other items in their possession, custody or control bearing the asserted marks of Nike, any marks substantially indistinguishable therefrom, confusingly similar marks.”
The lawsuit was filed in federal court in New York and Nike is also seeking unspecified damages.
StockX did not immediately respond to a request for comment.
Can Nike stop “unauthorized” NFTs?
The explosion and popularity of digital objects, especially NFTs, and their value has become a headache for lawyers. Nike’s lawsuit will test intellectual property rights, experts say. In other words, what does or does not constitute patent infringement in the emerging, decentralized and unregulated world of NFTs?
“One thing is clear, however: commercial use of a copyrighted work requires permission from the party or parties that own or control that copyright,” Andy Lee, of law firm Foley & Lardner, which has an NFT task force, recently told TheStreet’s Michael Tedder.