In January, StockX introduced what it called “Vault NFTs.” The program ties digital tokens which users can trade among themselves to real, physical items that the resale platform holds in its “climate-controlled, high-security vaults.” Though the initiative has since expanded to cover trading cards, watches and other collectibles, it originally launched with nine sneaker silhouettes—eight of which belonged to either the Nike or Jordan brands.
Nike sued StockX weeks later alleging the collection, which visually depicted Nike footwear on the graphics used to represent the NFTs, as well as materials promoting the launch, constituted trademark infringement, false designation of origin, unfair competition, trademark dilution and injury to its business reputation.
On Tuesday, it filed a motion to amend its original complaint, arguing additional facts “highly relevant” to its claims against StockX have “transpired or were discovered” in the past three months. In addition to adjusting its arguments, Nike added two new causes of action: counterfeiting and false advertising.
These new allegations center around Nike’s assertion that it bought four counterfeit pairs of shoes on StockX’s platform over a two-month period beginning in December—at least weeks before the marketplace launched Vault NFTs. Each of these pairs bore StockX’s “Verified Authentic” hangtag and came with a paper receipt stating the shoes were “100% Authentic,” Nike said. Among them was a purported Air Jordan 1 Retro High OG in the Black/Varsity Red-White colorway, one of the eight Nike styles included in StockX’s Vault NFT collection.
StockX created and sold 250 Air Jordan 1 Retro High OG “Patent Bred” NFTs, each of which is theoretically tied to an individual physical shoe that StockX physically possesses.
In its March 31 response to Nike’s original complaint, StockX argued that its NFTs “are absolutely not ‘virtual products’ or digital sneakers,” and have “no intrinsic value.” Instead, it described them as a “claim ticket” or “key” to the underlying item. In its proposed amended complaint, Nike contended that its own experience buying counterfeit shoes suggests that StockX’s NFTs could be serving as “claim tickets” to counterfeit sneakers.
“Given StockX’s statements that its ‘vaulted’ shoes are sourced from its marketplace and undergo the same ‘proprietary multi-step authentication process’ as the shoes Nike recently discovered were counterfeit, Nike is all the more concerned that StockX has linked the infringing Nike-branded NFTs to counterfeit goods and sold those ‘claim tickets’ to fake shoes at heavily-inflated prices to consumers who had no opportunity to inspect the shoes before reselling the NFT to another unsuspecting consumer,” Nike wrote.
StockX directly addressed Nike’s counterfeiting allegation in a statement published to its site Wednesday, describing this “latest tactic” as “nothing more than a panicked and desperate attempt to resuscitate its losing legal case against our innovative Vault NFT program that revolutionizes the way that consumers can buy, store, and sell collectibles safely, efficiently, and sustainably.”
“We take customer protection extremely seriously, and we’ve invested millions to fight the proliferation of counterfeit products that virtually every global marketplace faces today,” StockX wrote. “Nike’s latest filing is not only baseless but also is curious given that their own brand protection team has communicated confidence in our authentication program, and that hundreds of Nike employees—including current senior executives—use StockX to buy and sell products…. Nike’s challenge has no merit and clearly demonstrates their lack of understanding of the modern marketplace.”
The Swoosh brand used its counterfeiting allegation to support a proposed seventh cause of action: false advertising. By claiming and guaranteeing authenticity—it frequently uses the phrase “100% Verified Authentic,” but also claims an authentication accuracy rate of 99.95 percent—Nike argued that StockX made “false and/or misleading representations in order to take advantage of Nike’s immense goodwill and to induce consumers to purchase Nike shoes on the StockX platform.” These statements, it added, harm its reputation and divert consumer purchases from genuine goods.
Nike’s proposed amendedment also addresses additional details that have arisen since its original complaint, including how StockX has modified its language around NFTs. According to Nike, these changes included the removal or replacement of several of the “problematic and deceptive terms” it originally called out. These changes, it noted, do not excuse what it called “ongoing infringement” of Nike marks or resolve past infringement. However, the revisionary conduct “is nonetheless relevant” given StockX “obfuscated” these revisions in its legal response, Nike said.
The company also included details about the release of RTFKT’s Nike Dunk Genesis CryptoKicks NFTs in April. The virtual sneakers represented the company’s first sneaker NFT release. In both its original and revised complaint, it contended that its metaverse initiatives had been “highly publicized” and that StockX knew of Nike’s NFT plans “long prior” to its own Vault NFT launch.