Nike has filed a motion to expand its trademark lawsuit against StockX. The sporting goods manufacturer filed for the inclusion of counterfeiting and false advertising in its lawsuit against the Metaverse marketplace in the New York District Court Tuesday.
According to reports from New York-based news outlet Bloomberg, over a two-month period, Nike legal representatives purchased four counterfeit pairs of shoes from Metaverse platform StockX that receipts said were genuine goods.
Nike had one in February Lawsuit against StockX filed because the company offers NFTs that are tied to physical versions of coveted Nike sneakers, among other things. StockX stated that buyers of the NFTs would secure ownership of the shoes. In its application, Nike points out that the NFTs are assets from which StockX benefits due to the Nike brand image. “Unfortunately, novel product offerings, burgeoning technologies and gold rush markets tend to create opportunities for third parties to capitalize on the reputation of respected brands and create confusion in the marketplace,” Nike said in the court filing.
The Nike case is not the only one that could be decisive for the handling of trademark law in the field of NFTs. Last week, a New York federal judge dropped one Hermès lawsuit against artist Mason Rothschild by denying a motion for Rothschild to dismiss the case.
Rothschild was sued by Hermès after he sold ‘MetaBirkin’ NFTs depicting the luxury leather handbags as faux-fur versions during Art Basel in Miami in December. International news agency Reuters reports that Rothschild made at least $1 million from sales of the MetaBirkins before Hermès filed the lawsuit in January. In the lawsuit, Hermès characterized the Los Angeles-based artist as a “digital speculator trying to get rich quick by appropriating the brand.” The French fashion house also claims that Rothschild is “attempting to make a fortune by swapping Hermès’ ‘real property rights’ for ‘virtual property rights'”. Hermès also noted that it decided to sell digital MetaBirkins “because a Birkin handbag is a very valuable asset in the physical world”.
Hermès could lose process
After Rothschild received an initial cease and desist letter from Hermès in December, he posted a public response to the company on the MetaBirkins Instagram account. In it, Rothschild referred to his rights under Article 1 of the US Constitution, which allow him to “create art that [seiner] interpretations of the world around [ihn] based around.”
Although the judge denied Rothschild’s motion to dismiss the lawsuit, and the lawsuit is now being fought, Rothschild’s lawyers have already given examples that could rule the case in his favour.
“Rothschild’s art does not lose the protection of Article I of the Constitution just because it is sold,” says the countersuit, which relies on a 1989 trademark case. At the time, Oscar-winning actress Ginger Rogers was suing Italian film producer Alberto Grimaldi and MGM Studios over a film titled ‘Ginger and Fred’. Rogers argued that the film’s name misleads consumers into assuming they had something to do with the film. According to a legal dictionary provided by Cornwall Law School, she pleaded her right to publicity and the unauthorized commercial use of a person’s name, appearance or other recognizable aspect in the lawsuit. Rogers lost the case – the judge then ruled that unless the work has “minimal artistic relevance” and “the source of the work is not expressly misunderstood”, the risk of suppression of the creative work is greater than other risks, violating the right to artistic expression would be unduly restricted.
Rothschild’s legal team argues that his work is artistically relevant because the bags depicted with faux fur are a “commentary on animal cruelty in the fashion industry” and reflect “the initiatives to find leather alternatives”. In addition, the NFTs show “luxury without any function but only with communication value” and thus move away from the image of luxury bags. They would rather “question what luxury lovers actually pay for”.
Louis Vuitton lost a similar case against Warner Bros Entertainment in 2021. The French luxury house complained that a scene from comedy ‘The Hangover Part II’ showing a fake Louis Vuitton bag would infringe the trademark. Warner Bros Entertainment, like Rothschild, invoked the rights of the first article of the US Constitution.
Hermès is not currently active in the Metaverse. “Right now, we’re interested in seeing how this world evolves and changes,” Hermès CEO Axel Dumas said at the company’s shareholder meeting last month, according to Forbes magazine. “But that’s not a priority for us,” he added.
Statement of StockX
“We take protecting our customers very seriously and have invested millions to combat the proliferation of counterfeit products that virtually every global market faces today. Nike’s recent lawsuit is not only unfounded, but also odd considering that its own trademark protection team has expressed confidence in our authentication program and that hundreds of Nike employees – including senior executives – use StockX to buy and sell products. This latest tactic is nothing more than a panicked and desperate attempt to reignite the lost lawsuit against our innovative NFT program, which is revolutionizing the way consumers can buy, store and sell collectibles safely, efficiently and sustainably. Nike’s challenge is unfounded and clearly shows that the company does not understand the modern market.”
This translated post previously appeared on FashionUnited.uk.