Intellectual Property: Nike, Inc. v. StockX LLC

Written by Marsela Shalabi, Shriya Reddy, Nela Kabuzek, and Michael Bennett

On February 3, 2022, Nike (Plaintiff) filed a complaint against StockX (Defendant) for unauthorized and infringing use of Nike's famous marks in connection with StockX's entry into the Non-Fungible Token (NFT) market. NFTs are blockchain-based virtual products for collecting, selling, and trading, offering brands unique ways to engage consumers. Nike claimed these NFTs, which featured images of Nike-branded sneakers, infringe on its trademarks and cause consumer confusion. In March 2023, StockX contended that its NFT offerings for tracking physical goods ownership do not infringe Nike's trademark rights. The company contended that Nike's claims were unfounded, misinterpreted the functions of NFTs, and overlooked important legal doctrines such as the first sale doctrine and nominative fair use. The first sale doctrine allows for the resale of trademarked products without the original owner's permission after the initial purchase. Nominative fair use, on the other hand, permits the use of a trademark to identify a product in certain contexts, like advertising or reviews, provided there is no implication of endorsement by the trademark owner. These doctrines work together to balance trademark protection with competition and free expression. StockX emphasized the low likelihood of consumer confusion since customers understand they are purchasing authenticated physical goods.

In the 2010s, Nike focused on limited-edition releases and collaborations, such as Air Jordans and Off-White, creating scarcity that boosted demand and the resale market. While Nike benefitted from the hype surrounding limited releases, it also raised concerns over third-party resellers profiting from Nike's designs without brand control. Nike, in turn, saw StockX and other resell platforms profiting off their designs without receiving payment themselves. On March 4, Judge Valerie Caproni granted Nike partial summary judgment, a ruling that resolves specific issues in a case without deciding the entire matter, in its counterfeit dispute with StockX, finding the reseller sold counterfeit Nikes. However, Nike's claims of false advertising, trademark infringement, and other issues were denied. Remaining claims will be settled at trial between June 15, 2025, and November 15, 2025.

Counterfeiting has been an issue for most of history and affects many industries. Previous rulings such as Nintendo of America Inc. v. Marias through the U.S. District Court for the Western District of Washington, have reinforced the way courts have navigated counterfeiting based cases. In 2021, Nintendo filed a lawsuit against a seller who sold counterfeit Amiibo products on Amazon.com. The courts ruled in favor of Nintendo and the seller was ordered to pay over 7 million dollars. This case established three main precedents that many courts use to handle counterfeiting. The first precedence it reasserted was the right of companies to protect their trademarks, even if it may seem aggressive. It secondly established False advertising as a legal violation which was also used in the Nike vs. StockX case regarding StockX's "100% Authenticity" label. It lastly established the severity of the consequences that can be issued, as seen with the 7 million dollar penalty that the counterfeit seller has to pay to Nintendo. These precedents have established legal pathways for companies like Nike to address counterfeiting through consistent court rulings. Similar instances have existed prior for Nike to win this case.

Prior to Nike v. StockX, there have been many instances where well-known brands have sued resellers for trademark infringement and counterfeiting. In 2004, Tiffany v. eBay, Tiffany sued eBay for trademark infringement, claiming that eBay had resold counterfeit jewelry from Tiffany's. However, the District Court for the Southern District of New York ruled in favor of eBay despite having knowledge about counterfeit Tiffany products circling their online site. Subsequently, Tiffany appealed to the 2nd Circuit Court of Appeals, which held that eBay did not infringe on the company's trademark. In general, the court's ruling highlighted how online stores try to reduce the growth of counterfeit goods on their websites. Furthermore, in 2011, Coach v. Gina Kim made headlines when Coach sued a former employee, Ms.Gina Kim, who was allegedly selling counterfeit Coach bags on eBay for extra income. Additionally, in 2018, a suit evolved between Chanel v. What Goes Around Must Come Around (WGACA), where Chanel claimed that WGACA confused consumers by making them believe that Chanel affiliated themselves with WGACA, which harms the brand's reputation. In 2024, a unanimous jury in New York ruled in favor of Chanel on four counts regarding trademark infringement, where someone uses a name or logo without the other person's permission, unjust competition, when businesses engage in unethical practices to gain advantage over competitors, and false advertising where businesses mislead an individual to buy something. WGACA has asserted its innocence, claiming that they have never sold counterfeit products and insisted that its products are 100% authentic. Ultimately, Chanel was awarded $4 million in statutory damages, meaning a monetary value pre-set by statute. Recently, at the beginning of 2025, the District Court for the Southern District of New York gave its final verdict by affirming the 2024 decision. Therefore, these cases adequately demonstrate the lengths popular brands will go to in order to uphold their image and their commitment to their trademark.

There have been countless cases of Nike taking legal action against renowned companies and famous designers such as Luluemon, Warren Lotas, and BAPE. In 2020, Nike filed a lawsuit against Warren Lotas, a designer based in Los Angeles. Nike asserted that the sneaker design by Lota resembled the Nike Dunks, spurring consumer confusion. Nike also claimed that Lota had not sought permission from Nike before using their design. Moreover, in 2022, Nike attacked Lululemon's interactive home gym appliance for allegedly violating Nike's copyright related to technology. This is not the first time Lulumon has been a target of Nike regarding infringements on patents, and as of today, the case is still in litigation. Likewise, in 2023, Nike filed a lawsuit against BAPE, a business specializing in sneakers, for copying its footwear designs. The issue was settled in 2024 after BAPE agreed to revise its shoe designs. This case is part of a broader trend of large retailers pursuing legal action to protect their trademarks.