Footwear corporation Nike filed a lawsuit against online reseller StockX in the New York southern district on February 3, 2022, for using its non-fungible token (NFT) with authorization court, claiming that the NFTs were a trademark infringement on their product.
Not only that but the tokens were sold at increased prices. In response, the online reseller said the NFTs were a token that guaranteed the buyers a physical product.
After this incident, the footwear giant claimed to have purchased four counterfeit sneakers from the reseller between December 2021 and January 2022. Only one of these sneakers was the Jordan 1 patent-bred. The picture of the shoe released by media outlets showed the shoe having a SockX-verified hangtag.
The footwear incorporation included this in the filing stating that the shoes came with a receipt meaning they were 100% verified and authentic. The reseller’s proprietary authentication service claimed to use over 100 data points and that its authenticators were better equipped than any other.
Nike also invoked the reseller’s lack of a return policy making it important for the customers to trust the shoes as authentic. The footwear company added that the retailer might source its “Vault” shoes from the same marketplace as the counterfeit pairs.
In its updated complaint, the footwear company addressed the shoe reseller’s attempts to justify its practices, labeling them as insufficient and stating that StockX has yet to remove or alter its use of the shoe incorporation’s trademarks on its Vault NFTs.
Nike reportedly asked the court to rule in favor of them as opposed to StockX
In recently unsealed court documents filed in August 2024, the shoe incorporation accused the reseller of selling counterfeit sneakers and engaging in deceptive advertising, which it describes as harmful and misleading.
Nike is seeking a ruling in its favor on claims of willful counterfeiting and false advertising before the case goes to trial.
The filing also alleged that the reseller knowingly passed off counterfeit Nike products as genuine. It points to internal documents, which reportedly acknowledged the sale of hundreds of fake items, with the reseller attributing the issue to defects approved by the shoe company during manufacturing.
The shoe incorporation contends that these practices create consumer confusion about the authenticity of its products. This confusion, according to the company, can result in lost sales, negative consumer feedback both directly and on social media, and damage to relationships with business partners and affiliates.
On November 16, 2024, the reseller released a statement on X writing,
“Nike's claims are completely misguided. Contrary to their allegations, StockX is a leader in the fight against counterfeiting, a pervasive issue affecting brands globally. It's why verification has been at our core since inception, and because of our leadership in this space Nike has previously recommended StockX to its customers, partnered with StockX, and praised StockX as "a good actor."
The reseller added,
“We have invested millions of dollars in technology, training, and tooling to deliver on our commitment to our customers, and we stand behind our verification process with our Buyer Promise.”
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StockX defended itself, stating the counterfeit products represent only 0.0004% of the 17.8 million Nike sneakers it reviewed during the litigation.
The company emphasized its efforts to block over $80 million worth of suspected counterfeit sneakers and criticized the shoe incorporation for pursuing costly litigation instead of collaborating to combat fakes.
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