The online retailer StockX has sold unauthorized sneaker NFTs from Nike. The sporting goods manufacturer does not want to put up with this and is filing a lawsuit. Because Nike itself also wants to get into the business with NFTs.
NFTs are gaining more and more momentum. Between 2018 and 2020 alone, the market capitalization of non-fungible tokens has increased almost tenfold.
While NFTs worth just under 40.1 million U.S. dollars were traded in 2018, this figure had already risen to 338 million U.S. dollars by 2020 – and the trend is rising.
More and more major brands are also entering the non-fungible token business. But even here, brand manufacturers like Nike are not immune to counterfeiting.
Nike sues against unauthorized sneaker NFTs
In a New York federal court, sporting goods manufacturer Nike filed a lawsuit against online retailer StockX on Thursday, Reuters reports. The reason is unauthorized sneaker NFTs showing Nike models.
The sporting goods company refers to its trademark rights in its lawsuit. The unauthorized sneaker NFTs would infringe the trademark and could confuse customers. According to the lawsuit, StockX allegedly sold 500 Nike NFTs.
These unauthorized products are likely to confuse consumers, create a false association between these products and Nike, and dilute Nike’s famous trademarks.
Now, according to Reuters, Nike is seeking “unspecified damages” as well as a ban on the sale of the non-fungible tokens by the online retailer.
The problem with unauthorized sneaker NFTs
In its lawsuit, Nike refers to complaints from customers. According to the complaint, the “excessive prices and non-transparent purchase and ownership conditions” of the NFTs were criticized. Buyers also have doubts about the legality of the StockX NFTs.
According to Nike, StockX has been selling unauthorized sneaker NFTs since last month. The online retailer is said to have promised its customers that they could exchange their NFTs for real shoes “in the near future”.
The legal dispute is particularly interesting when one takes a closer look at Nike’s plans. The sporting goods manufacturer itself plans to launch “a range of virtual products” this month.
The NFT sale at SkockX
The online retailer StockX had announced in January that it wanted to enter the business around NFTs.
In doing so, the online retailer is particularly targeting sneaker fans who collect sneakers as assets. StockX wants to use NFTs to make it easier to trade in the shoes, as this eliminates the need to send the real sneakers back and forth.