Quick Summary
- Nike claims its reputation has suffered because of StockX’s platform unclear actions. The complaint said over 500 Nike trademark shoes have been sold from StockX.
Nike is an American multinational shoe company famous for its shoes, apparel, and equipment. Nike, one of the most valued brands in sports, employs about 76,000 people worldwide. Nike filed a lawsuit case recently against the online marketplace StockX, which Nike has accused of selling NFTs that infringe on its trademarks.
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The Battle For NFTs
Non-fungible tokens (NFTs) are unique and cannot be replaced by other tokens. Ethereum (ETH) is a cryptocurrency with its own blockchain, but its blockchain also enables these NFTs, which hold extra information that allows them to function differently from ETH.
StockX is a Detroit-based company and a resale platform for coveted sneakers. It was valued at $3.8 billion after a funding round last year. StockX verifies its authenticity by launching NFTs linked with physical goods. “Vault NFTs” can be cashed for actual items, but they can also be traded as digital products instantly. StockX also sells Nike shoes on its platform, and their vault tokens are connected with the name and picture of their related products.
StockX almost solely exploited Nike’s trademarks to launch their Vault NFTs because they thought it would gain attention, promote sales, and mislead consumers into thinking Nike partnered with StockX on the Vault NFTs.
The complaint said: Over 500 Nike trademark shoes have been sold from StockX since yet.
According to the lawsuit, Nike’s corporate reputation has suffered due to concerns about the NFTs “inflated costs and unclear terms of acquisition and ownership,” as well as customers’ suspicions about the legality of StockX’s strategy.
Customers who purchase StockX NFTs have the option of receiving the actual sneaker, which would remove the NFT from circulation or maintaining the digital asset on the blockchain, which would allow it to be resold on StockX’s platform.
StockX has denied the allegations, Katy Cockrel, communications vice president, issued a statement. “Our Vault NFTs describe and represent physical things housed in our vault that clients can trade on our marketplace.” The StockX Vault NFTs are neither virtual nor digital sneakers.
“We do not imply that our Vault NFTs are related with, sponsored by, or officially connected to any third-party brand,” the statement states. “StockX has unquestionably earned the right to offer our consumers this fresh and inventive approach to trading contemporary culture products, and we intend to defend our position actively.”
“What StockX is arguing is that, fundamentally, we’re executing the same transaction, but we’re just using an NFT to stand in for the real shoes.” Nike, on the other hand, claims that the NFTs is a separate product that capitalizes on its brand.
Conclusion
Just a little while ago, people didn’t even know about NFTs. Now it’s a billion-dollar industry that everybody is interested in. Nike, Gucci, and many other huge companies are into NFTs and it’s almost certain there will be more fights and lawsuits about NFTs in the future.
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sources: theverge, fortune
author: Rene Remsik, Hafiz Awaiw
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
