Ongoing legal tussle between popular sneaker maker Nike and online global reseller StockX has taken a fresh twist. In a counter court filing, the defendant has termed the giant shoe manufacturer’s claim of trademark right infringement as baseless. What is really going on?
Fundamental Misunderstanding of NFTs
In a court filing to the Southern District of New York, popular sneaker maker Nike commenced legal proceedings against StockX in which the company mentions the unauthorized use of its trademark. The case commenced following StockX’s entry into the non-fungible token (NFT) space and the subsequent use of the Nike brand of sneakers.
The defendant has since responded by stating that Nike’s case ‘lacks merit.’ StockX has further strengthened its position by stating that Nike has a fundamental misunderstanding of the various uses NFTs can serve hence the backlash it has received.
StockX has defended its push into the NFT space by pointing out that cryptographically-unique tokens featuring Nike’s legendary swoosh sign are only used in authenticating their goods and services. According to the $3.8 billion valued company, its Vault NFTs are not commercialized as standalone products but are similar in nature to regular product descriptions rather than as a separate service.
Each Vault NFT is tied to a physical product and users can choose to leave their physical purchases in StockX’s custody or swap the Vault NFTs for the physical item.
StockX claims that its turn to NFTs was spurred largely due to the astronomical costs incurred in servicing its customers.
Putting the court through the process, StockX stated that sellers in its e-commerce platform have to send their merchandise to its eleven authentication centers globally with the company then undertaking a rigorous multi-step authentication process. From there, the customer’s order is then shipped.

Coupled with this, StockX also claims that a number of its clientele are satisfied with not physically owning the company’s current culture products.
Given this, its switch to NFTs have largely stemmed from a business standpoint rather than to leech off the giant sneaker company’s reputation. With NFTs now enabling tracking and authentication of quality products, StockX’s customers can save costs as well as authenticate the quality of their purchases.
NFTs are cryptographic digital bits of data that are used to show proof of ownership. Having its early beginning in 2014, the nascent sub-sector has since boomed following the rise of the aggregation of the virtual and physical worlds. These digital assets are stored on a blockchain and each NFT is unique and immutable.
NFTs came into pop culture following a number of record sales in 2021 of which Beeple’s Everyday: the First 5000 Days is one of the top NFTs. The digital artist reportedly sold the collection of digital images for a then record amount of $69.3 million, making him the third most valuable living artist in the world. And other artists follow suite, making a killing in the NFT space.
Non-fungible Battle Heats Up
NFTs have not had a smooth sail just like its counterparts, that is cryptocurrencies, that have been targeted for their criminal tendencies. However, the nascent sub-sector has been written off as purely fictitious and only a curation of JPEGs stored on a computer software.
However, NFTs have since crossed this horizon and increased their use cases. The digital asset class now thrives in the virtual reality space where efforts by top tech giants like Facebook (now Meta) and Microsoft are becoming more apparent.
The growth of the sector has also created some issues between creators, with French fashion house Hermes playing a notable role. In a court filing, Hermes stated that digital artist Mason Rothschild was trying to get rich quick off its signature Birkin bag. The NFT in question is duly named METABIRKINS. Rothschild was said to have sold the digital image of a handbag for $42,000 in December, 2021.