Earlier this year, Nike sued StockX, an online marketplace selling non-fungible tokens (NFTs) of images containing Nike shoes, claiming that StockX misuses its trademark by minting NFTs that include Nike shoes. Nike's lawsuit says NFTs are "an exciting way for brands to interact with their consumers in and out of the 'metaverse,' and diverse commercial applications of NFTs have emerged throughout the past two years." Nike worries that people who buy these NFTs from StockX may think that Nike authorized the image. The pleadings have some photos of bespoke Nike shoes, such as the 2018 Chunky Dunky SB. Nike filed the suit in federal court in Manhattan with a request for a jury trial. Nike claims the lawsuit is to protect its brand and customers, but its approach is misguided. These marketplaces help promote Nike's brand and are a direct result of Nike's effort to limit availability.

What Is StockX?

StockX is a resale marketplace that sells everything from sneakers to difficult-to-find clothes and toys—all new, although the site is perhaps best known for its sneaker resale market. Nike sneakers are a big part of this resale market, but you can basically find any sort of shoe you want on the StockX site. StockX doesn't actually own or possess the shoes but serves as a platform that matches buyers and sellers—each item has a "lowest seller ask price" and a "highest buyer bid price." These prices constantly fluctuate as buyers match with sellers. When a sale takes place, the seller sends the item to StockX for authentication before it goes to the buyer (with StockX's authentication). The lawsuit cites some Twitter dialogue and Reddit activity (which seems to have no affiliation with StockX) to show consumers are confused about whether Nike authorizes the authentications (assuming actual people are behind these messages). As of April 2021, StockX was valued at $3.8 billion.