Nike Ends NFT Trademark Case Against StockX

Nike and StockX jointly filed for dismissal of their three-year-old court case following their amicable settlement.
Analysts see it as a win-win situation as it prevented a more painstaking scenario with the jury, which could have stretched the lawsuit longer.

After a three-year stretch, footwear and apparel giant Nike finally ended its NFT (non-fungible token) trademark case against online marketplace and clothing reseller StockX. A US District Court resolution on Friday revealed that the parties have already reached a settlement. As a result, the judge has dismissed the lawsuit with prejudice.

The judge didn’t order any fines or compensation since the case has yet to enter jury trial in October. It also didn’t mention the settlement’s terms other than the fact that the parties will have to bear their respective legal fees, expenses, and costs.

The plaintiff and the defendant indicated in their joint statement that they resolved the charges amicably on confidential terms. Additionally, since the judge dismissed the case with prejudice, it no longer allows any of the parties to revive the lawsuit under the same circumstances.

The Nike Vs StockX Lawsuit

The spat between the companies started in 2022. Nike accused StockX of trademark infringement, product dilution, and unfair competition practices. This stemmed from the latter’s unauthorized sale of Vault NFTs bearing images of the former’s signature shoes.

Nike argued that StockX’s actions mislead customers into thinking the companies have partnered for a project. Moreover, the footwear and apparel manufacturer stated that the false association, together with the questionable terms of the sale and pricing of the Vault digital asset collection, has diluted its trademarks. Hence, the plaintiff asked the court to block further issuance and sale of the NFTs in question. It also sought unspecified monetary compensation for damages to its brand and products.

StockX countered the lawsuit. The online reseller pointed out that its Vault NFTs merely represented digital receipts tied to Nike’s physical goods. So, they did not come as standalone products. It explained that its actions were no different from those of e-commerce retailers and marketplaces that use images and descriptions of products to sell physical goods. The company denied any misrepresentation from the NFTs, which may confuse buyers.

Later, Nike amended its complaint to accuse StockX of selling counterfeit sneakers. It claimed that the Nike footwear the defendant sold lacked authentication from the manufacturer. The plaintiff stacked the new allegation on top of its trademark infringement charges.

A Win-Win Scenario

Several analysts saw Nike and StockX’s move as a win-win scenario. It prevented a jury trial, which could have prolonged the case and added to the expenses of the litigants. Furthermore, it saved Nike from getting its intellectual property (IP) strategy re-evaluated by the jury, to which an unfavorable verdict could set a negative precedent in its future enforcement actions. On the other hand, it allowed StockX to dodge a bullet from liabilities arising from its unauthorized use of Nike’s brand, products, and their image and likeness, especially in its controversial NFT project.

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