StockX kicked off the new year by introducing the StockX Vault, the company’s first venture into the Metaverse via NFTs. StockX Vault gives users the chance to purchase a digital NFT that’s backed by a real-life sneaker or product being stored away in a StockX facility. Just two weeks after the Vault launch, Nike sued StockX in federal court for “blatantly free-riding” and selling unauthorized Nike NFTs. It’s been almost two months since the initial filing and StockX has finally responded.
In a court filing reported by Bloomberg, StockX responded to the trademark-infringement lawsuit saying that Nike has a “fundamental misunderstanding” of nonfungible tokens. From there, StockX explains that the Vault NFTs are more than just virtual sneakers, but e-commerce listings that represent physical sneakers that users can buy or sell – just like the typical sneaker resale exchange. The only difference is people don’t actually receive the physical pair, which eliminates the shipping fees and delays that people experience when purchasing sneakers the traditional way.
StockX further defended their stance saying, “Using NFTs in this manner is lawful and violates no legitimate right of Nike or any of the manufacturers of the underlying goods. Nike’s claims lack merit, disregard settled doctrines of trademark law, including the doctrines of first sale and nominative fair use.”
As the Metaverse continues to expand, the gray-area between the virtual world and real life widens. This newfound digital territory makes it hard for limits to exist in a realm that has no rules. Yet even with all the confusion, every major brand from ASICS, to BAPE, and even adidas, who partnered with Prada to release a special NFT project, have gotten in on the action. As one of the biggest Metaverse moves of them all, Nike officially acquired RTFKT just before 2021 ended. This happened almost directly after Nike filed for trademark protection in October of 2021, with the intent to sell “downloadable virtual goods” and “retail store services featuring virtual goods.”
While the Nike NFTs are a large part of the StockX Vault, the platform also sells other NFTs made in the likeness of brands like adidas, Puma, and Supreme, as well as Pokemon cards and Topps sports cards. StockX still stands by their claim that the Vault NFTs are “effectively a claim ticket” for the items being sold, rather than just a digital asset.
“Nike’s suit threatens the legitimate use of NFTs not just by StockX, but by other innovators that also use NFTs to track title to physical goods held in a vault, such as fine art, whiskey, and wine,” StockX said in its filing.
Even while all of this is going on, StockX still plans to go public later this year. The reselling platform has expanded past sneakers, selling a variety of products, assets, and collectibles that have become attractive to investors. At this time there’s no word on what the StockX IPO will open at, but considering the company was valued at $3.8 billion in April of 2021, it could be quite high.