StockX hits back at Nike over allegations of selling counterfeit shoes

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Online resale marketplace StockX is hitting back at Nike’s claims that the site allows the sale of counterfeit versions of its sneakers.

StockX, in response to Nike’s allegations, defended its anti-counterfeiting measures and said that Nike itself had previously praised them, according to a draft court filing seen by CNBC. The response is expected to be filed in US District Court in New York on Monday.

“In the past, Nike has sought to collaborate with StockX and communicated its confidence in StockX’s authentication process,” the Detroit-based company said in the draft filing.

Nike and an attorney who represented Nike in the case did not immediately respond to a request for comment.

The legal battle between Nike and StockX began over non-fungible tokens, or NFTs, which are unique digital assets that consumers can buy and sell. Nike sued StockX in February, claiming Nike shoe NFTs in the online marketplace infringed trademarks and could confuse customers. Nike, which had been preparing for several months to enter the so-called metaverse, began selling its own NFTs earlier this year, raking in colossal sums. StockX argued that it uses NFTs to authenticate products.

Nike, which has bolstered its own online business, added to its lawsuit last month, saying in an amended complaint that it was able to purchase four pairs of counterfeit shoes from StockX that were verified as genuine. One of the pairs matched a StockX NFT, Nike said.

Nike said in its amended complaint that it obtained the questionable shoes through StockX from December to early February, just before filing its original lawsuit against the company. In its draft filing, StockX questioned why Nike waited until May to include its counterfeit sneaker allegations.

“Nike’s recent allegations lack merit, demonstrate a lack of understanding of the modern marketplace, and display anti-competitive behavior that will stifle the secondary market and harm consumers,” StockX CEO Scott Cutler said in a statement. “We look forward to defending our reputation and understanding why Nike, which once sought to collaborate in the fight against counterfeits, is now seeking to undermine StockX’s business model.”

StockX, which promises “guaranteed authenticity”, says it is different from other resale sites because all products on its marketplace are physically inspected and authenticated before being delivered to buyers. The company was valued at $3.8 billion and has multiple authentication sites around the world. It claims in its draft response that its authenticators inspected more than 30 million products and prevented $60 million worth of counterfeit sneakers from reaching buyers.

StockX has, however, acknowledged the possibility that counterfeit products may escape its verification process. In its filing, the company noted its refund policy “for the rare event that a counterfeit product might end up in the hands of a consumer.”

“This fact alone undermines any allegation that StockX knowingly or intentionally sells such products,” the filing states.

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