Even the Metaverse is not free from trademark law rules and regulations.
In one of the first major legal disputes to occur in the virtual realm, Nike filed a lawsuit against StockX, alleging the resale sneaker market used Nike-branded logos and products in an attempt to to enter the market for NFTs, or non-fungible tokens. .
According to the lawsuit, which was filed Thursday in a United States District Court in New York, StockX mints, markets and sells NFTs that bear Nike’s trademarks at “heavily inflated prices” without the approval or permission from Nike.
“Unlike its e-commerce business which caters to buyers and sellers of goods from a variety of companies, almost all of the NFTs issued by StockX to date are Nike-branded NFTs, but none of these NFTs are from Nike. “, we read in the lawsuit.
In January, StockX launched “Vault NFTs,” a program that allows users to invest in NFTs tied to physical sneakers. As part of the launch, StockX released NFTs of sneakers such as the A Ma Maniére x Air Jordan 3, Ben & Jerry’s x Nike SB Dunk Low and Bad Bunny x Adidas Forum Low “First Café”.
Nike alleges that the use of unauthorized Nike-branded NFT Vaults will confuse consumers and “create a false association between these products and Nike, and dilute Nike’s well-known trademarks.”
Nike and StockX declined to comment.
The case represents one of the first major legal disputes to emerge in the area of virtual goods. Over the past few months, several brands have announced forays into the metaverse, whether through virtual games, merchandise, or NFTs. In many cases, these brands have filed trademark applications for digital virtual shoes, apparel, and more.
“The existing registrations they have on these marks don’t cover virtual goods because virtual goods weren’t a thing five or 10 years ago,” explained trademark attorney Josh Gerben of the law firm. Gerben at FN previously. “No one really thought you might need protection on something like this.”
In this case, Nike highlighted its recent public efforts to enter the metaverse, including its December acquisition of RTFKT, a digital creator of virtual sneakers, collectibles and accessories. Prior to that, Nike filed seven trademark applications related to its goal of creating and selling virtual sneakers and apparel. Nike has also partnered with video game platform Roblox to launch “Nikeland”, a digital world for Nike fans to play games, log in and dress up their avatars in virtual clothing via a digital showroom, which includes products like the Air Force 1 and Nike Blazer. .
“StockX was aware of Nike’s plans to expand into the NFT marketplace long before it launched ‘Vault NFT’ in January 2022,” Nike alleged in the filing.
In addition to its trademark applications in the virtual domain, Nike also pointed to trademarks previously filed on physical products, arguing that Nike has also used these trademarks in connection with products in the virtual world. Therefore, Nike suggested that trademark ownership be fully respected in the virtual realm in the context of this case.
While Nike may have an argument, the strongest bet for legal protection in this area is to rely on trademark claims filed specifically for the virtual world.
“All brands will want to have brand protection around the products they might sell in the [metaverse]”, said Gerben.