StockX Fights Back Against Nike’s NFT Lawsuit

StockX is currently embroiled in a legal battle with Nike, as it seeks to dismiss some of the claims made against it in a lawsuit concerning the sale of non-fungible tokens (NFTs) linked to Nike footwear. The online resale platform argues that Nike has not provided sufficient evidence to support its allegations of false advertising.

Key Takeaways

• StockX aims to dismiss false advertising claims from Nike.

• The lawsuit centers around NFTs tied to Nike footwear.

• StockX argues that its advertising does not mislead consumers.

Background Of The Lawsuit

Nike initiated the lawsuit against StockX in February 2022, accusing the resale platform of trademark infringement and unfair competition. The complaint highlights that StockX marketed its Vault NFTs using Nike trademarks, which allegedly caused confusion among consumers regarding the source of the NFTs and Nike's involvement.

Nike's complaint raises concerns about the potential misuse of web3 technology, stating that NFTs have become a platform for infringers to exploit well-known trademarks.

StockX's Defense Strategy

In its motion for partial summary judgment, StockX contends that Nike has failed to demonstrate that its advertising practices mislead consumers or harm Nike's brand. The company emphasizes the following points:

1. Accuracy of Claims: StockX asserts that its claims regarding the authenticity of the NFTs are accurate and do not mislead consumers.

2. Material Impact: StockX argues that Nike has not shown that its advertising significantly influences consumer purchasing decisions.

3. Lack of Evidence: The company highlights that Nike did not provide survey evidence or consumer testimony linking its claims to consumer behavior.

Legal Precedents Cited

StockX references case law from the U.S. Court of Appeals for the Second Circuit, which requires proof that alleged deceptive advertising significantly affects purchasing behavior. The company argues that simply presenting advertising statements is insufficient without evidence of their impact on consumer choices.

Nike's Claims And StockX's Counterarguments

While StockX seeks to dismiss the false advertising claims, it does not contest Nike's broader allegations of trademark infringement. Nike's sealed filings include claims that StockX facilitated the sale of counterfeit sneakers and engaged in false advertising.

In response, StockX emphasizes:

• Multiple Interpretations: StockX argues that its advertising claims are open to multiple reasonable interpretations, which prevents them from being deemed literally false.

• Absence of Harm: The company asserts that Nike has not demonstrated any actual harm resulting from its advertising, as there is no evidence of lost sales or reputational damage.

Conclusion

The ongoing legal battle between StockX and Nike highlights the complexities of trademark law in the digital age, particularly concerning NFTs. As both companies prepare for further legal proceedings, the outcome of this case could have significant implications for the resale market and the use of NFTs in brand marketing.

The case is officially titled Nike, Inc. v. StockX LLC, 1:22-cv-00983 (SDNY).

Sources

• Unsealed Filings Show StockX Push Back Against Nike Lawsuit, The Fashion Law.