Anita Gogia is a IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On on the intriguing case. engages novel issues of trademark infringement, trademark dilution, and cybersquatting (MetaBirkin.com domain name in this case) by artists in the metaverse.

Rothschild that depicted the Hermès Birkin bag in digital fur instead of leather, seemingly present in luxury handbags. The NFTs were on every further sale. After Hermès took down the NFTs from OpenSea, Rothschild moved to a different marketplace and “MetaBirkin” on Discord. Rothschild argued that “” and that the NFTs were a “” under First Amendment protection. Essentially, he argued that “MetaBirkins” were .

The jury found that Rothschild’s “MetaBirkin” NFTs . The key issue was whether the “MetaBirkin” was artistic expression under First Amendment protection, or a commercial product that causes consumer confusion. The jury concluded that while artistic expression was present, Rothschild intended to confuse consumers.

During the trial, Hermès provided evidence of actual consumer confusion which included about if “MetaBirkins” were connected to Hermès. Rothschild rejected these claims by providing that he to his website clarifying that the “MetaBirkins” were not connected with Hermès in any way and that his .

The jury was also influenced by Judge Rakoff’s reasons to deny the motion for summary judgment, and his exclusion of expert testimony. Judge Rakoff held that the test for artistic works applies where the key inquiry is This test was applied as opposed to the test, . Thus, Judge Rakoff held that the artistic relevance was present. Blake Gopnik provided expert testimony that Rothschild brought forth in this case. Had this been admitted, the jury ; thus aligning them in the artistic expression context.

Following the decision, Rothschild’s legal team that the dispute is “.” The team also pointed out Hermès’ hypocrisy as a luxury fashion brand who claim they care about artists but “.” This case has been followed by many to observe how the court resolves the issue of NFTs using intellectual property for the purpose of artistic expression. It is unknown whether this decision stands as precedent since intellectual property right disputes are significantly context-based. After this decision, artists can only conclude for certain the importance of obtaining legal advice before using IP in their NFTs, even if it is in the name of artistic expression.

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Amin Hosseini is an IPilogue Writer and an LLM Candidate at Osgoode Hall Law School.

The Singapore High Court ruled on 21 October 2022 that non-fungible tokens (NFTs) can now be considered property, . are blockchain-based assets with a distinct identification number and metadata which can represent real-world objects and cannot be copied or replaced. They are minted using smart contracts. In , the NFT's owner applied for a loan on and provided the as collateral. Later, he failed to make loan payments and asked for an extension. The defendant initially consented to offer an extension of time to repay the loan. However, ��he also declared that if the loan was not fully paid by the timeframe, he would use the "foreclose" option of the NFTfi's Smart Program. The defendant then used the "foreclose" feature to move the NFT from the escrow account into his cryptocurrency wallet. The claimant reminded the defendant of their agreement but the defendant declined to negotiate further and declared he would keep the Bored Ape NFT for himself. He then advertised sale of the Bored Ape NFT.

The claimant then sued the defendant for an “equitable proprietary claim” over the Bored Ape NFT, conversion, breach of contract, and unjust enrichment. The claimant also requested a proprietary injunction banning the defendant from dealing with the Bored Ape NFT in any form.

The court had to determine whether the Bored Ape NFT, and NFTs in general, are capable of giving rise to proprietary rights which could be protected by an injunction in making its decision. In deciding the case, the court applied Lord Wilberforce’s criteria for property in National Provincial Bank Ltd v. Ainsworth (the “Ainsworth test”), which was previously used to decide if crypto assets are property.

According to the , “before a right or an interest can be admitted into the category of property, or of a right affecting property, it must be (1) definable, (2) identifiable by third parties, (3) capable in its nature of assumption by third parties, and (4) have some degree of permanence or stability.”

The court maintained that the test’s first criterion means that the asset must be capable of being isolated from other assets, whether of the same type or of other types. Thus, NFTs fulfil the first requirement, since they can be distinguished using their metadata. Second, the asset must have an owner who can be recognized by third parties. For NFTs, the presumed owner would be whoever manages the wallet that is connected to the NFT. The third requirement comprises two aspects: “third parties must respect the owner's rights in that asset, and that the asset must be potentially desirable.” Here, the court believed that these prerequisites would be satisfied because ��the owner has the exclusive authority to transfer the NFT to a third party using blockchain technology and such NFTs are the subject of market activity. Finally, to satisfy the fourth requirement, the aforementioned NFT is as permanent and stable as money in bank accounts.

The court that NFTs meet the Ainsworth criteria and therefore may be formed as property in a general sense, leaving open the question of what the specific nature of this property right is. For the reasons outlined, the court approved the claimant's request for a proprietary injunction.

This decision demonstrates that NFTs can be considered property ��separate from the item they represent. The judge's ruling is a turning point for NFTs and the decision may have widely applicable effects and implications.

Further reading

Read more mere about .

To read more about the absence of proper Regulation of NFT Platforms and the associated outcomes, please see .

For in-depth knowledge about how smart contracts combine property and contract functions, please see .

The post Steps forward: Singapore Deems NFTs as Property appeared first on IPOsgoode.

Tianchu Gao is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On April 20, 2022, China released a first-of-its-kind on a dispute over the alleged infringement of a non-fungible token (“NFT”) published on a trading platform.

The dispute arises from a copyrighted image known as “,” a cartoon depiction of a tiger receiving a vaccination. A third party released the image as an NFT and published it on the defendant’s NFT trading platform. The NFT image even has the original author’s watermark in the lower right corner. The official licensee of the image the trading platform for failing to protect its right of dissemination under copyright principles. It argued that the defendant, as the operator of a professional NFT platform, should conduct a preliminary review on the copyright of the NFT works published on its platform. The defendant, on the other hand, argued that its obligation was only to review the notification and delete suspicious works accordingly.

Like most jurisdictions in the world, China has yet to publish laws that deal with the trading of NFTs. Moreover, the NFT market in China is unique because the government is firmly opposed to cryptocurrency and has issued a regulatory document () in September 2021 to restrict its circulation in China. As a result, NFTs in China are digital commodities traded in traditional fiat currency. Examples of Chinese NFT markets include NFT China, Huanhe, and Jingtan. E-commerce platforms in the past, according to the , are not liable for copyright infringement unless they know or should know that the linked items are infringing copyright.

The court found the trading platform in this case liable for infringing the licensee’s right of transmission over an information network. The court also ordered the defendant to delete the infringing NFT works and compensate the licensee 4,000 RMB (about USD$600). Although the fine is nominal, it is a significant decision that requires NFT trading platforms to shoulder a greater duty of care to protect the copyrights of published works.

With the case as an important step, the Chinese legal system for online trading platforms is developing with greater emphasis in favor of copyright holders. With the power Chinese courts wield over China-based defendants, the lower litigation costs in China, as well as the relative ease of obtaining certain injunctive relief, China may become for multinational companies to enforce their copyrights.

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Tianchu Gao is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On ��July 18^th, 2022, the world’s second-largest art auction house, Christie’s, announced the establishment of , an investment fund that will support emerging tech companies whose products could have an impact on the art market. According to a representative, the fund is estimated to hold “.” Some may think that it is strange that an auction house would launch a venture fund, but it is not the first time that Christie’s has made a daring venture to embrace the latest technologies in its highly exclusive art businesses. The auction house was one of the first art institutions to arrange NFT sales. The March 2021 sale of digital artist Beeple’s work, , sold for a record-breaking price of 69.3 million. It even launched a two-day conference, , in July 2022, which brought in leaders from both industries to discuss the role and impact of technologies in the art world.

According to the global head of Christie’s Venture, Devang Thakkar, to solve the problems that have long bedeviled the art trade, such as authenticity disputes and safe digital asset transactions.

Christie’s Ventures will focus on : 1) Web 3.0 innovations such as non-fungible tokens, cryptocurrencies, blockchains, etc.; 2) art-related financial products; and 3) technologies that enable seamless consumption of art.

Christie’s Venture’s first investment supported a Canadian Web 3.0 company called . It provides a protocol that allows different blockchains to communicate and work together. The company had already raised CAD$ dollars in its first funding round earlier this year. It will work with Christie’s to “find new and innovative ways to create the most accessible, frictionless experience with assets indexed over multiple blockchains,” says , LayerZero Labs co-founder.

It is worth noting that Christie’s advancement into the venture capital market happened in the context of the recent crash in crypto and the broader selloff in tech stocks. Traditional venture capital firms are pulling back from the risky bets on startups, and the funding for startups altogether fell in the second quarter compared to the first quarter. Many crypto startups are undergoing since June. In fact,����from $93.2 million in 2021 to less than $5 million during the first half of this year.��

Despite the economic downturn, Christie’s clearly believes in the increasingly prominent role of technology in the art market. In fact, the world’s largest auction house, Sotheby’s, is also “actively investing in and acquiring early stage ventures,” though not through a formal venture-capital arm, according to an article in ��The . Christie’s move into the venture capital space challenges the traditional image of what an auction house can do.

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Anita Gogia is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

The by Judge Rakoff for a motion to dismiss in the case of clarified the applicability of and the on NFTs containing trademarks for artistic expression. ��This case has significance in the application of our current understanding of trademark infringement in the metaverse.

Suggested reading: The March 2, 2022 article titled written by Jasmine Yu was posted on IPilogue and covers the early developments and key legal issues of this case.

Background

In brief, on January 14^th, 2022, Hermès filed a complaint against Rothschild for his use of Birkin bag trademarks in his NFTs. This case differed from other counterfeit trademark infringement cases because Rothschild’s work (100 NFTs of various Birkin bags) has no physical form. Hermès these “MetaBirkins” diluted their trademarks and goodwill contrary to s. 43(a) of the and are commercialized similarly to their valuable real-life products.

The Arguments

On February 9^th 2022, Rothschild submitted a motion to dismiss. On March 21, 2022, Rothschild , where he argued that ��his MetaBirkin commented “on the animal cruelty inherent in Hermès’ manufacture of its ultra-expensive leather handbags, and that the MetaBirkin is speech, art, and expression protected by the First Amendment. Harvard Law School Professor Rebecca Tushnet, representing Rothschild, .

the Rogers test from a 1989 2^nd Circuit ruling— those using trademarks for artistic expression which doesn’t explicitly mislead consumers are protected from infringement claims. The bar is high, and a slight risk that the use of a trademark suggests endorsement or sponsorship is “outweighed by the danger of restricting artistic expression”. Tushnet has also stated that anything but a dismissal of the case may have a on artists.

On the other hand, that Rogers does not apply because Rothschild’s actions of setting up an online store and the marketing materials support a goal of selling a digital good. To this, Tushnet that artists are protected in marketing their work to make a profit. Hermès also argues that in which he said that there wasn’t “much difference” between having the crazy handbag or “now” bringing that into the metaverse illustrates that the MetaBirkin NFTs are a commodity. that the court should apply the Polaroid factors to evaluate whether the use of the trademarks confuse the public.

The Decision

In May, Judge Rakoff Rothschild’s motion to dismiss, releasing detailed for his decision on May 18^th, 2022. that the Rogers test applies in this case because the MetaBirkin NFTs “could constitute a form of artistic expression”. Using the NFTs . .However, the motion was ultimately denied because the Court held that the MetaBirkin does not satisfy the Rogers test at this stage as Rothschild intended to associate the NFTs with the goodwill of their Birkin marks. that Hermès made sufficient allegations of “explicit misleadingness” and so denies the motion to dismiss. Rothschild’s argument that the court should not follow the Polaroid likelihood-of-confusion factors in assessing whether MetaBirkin explicitly misleads per Rogers.

It is notable that Judge Rakoff was influenced by Rothschild’s marketing efforts and commercial actions — this casted doubt as to whether the NFTs were meant only for artistic expression and not as commercial goods.

Although freedom of artistic expression varies globally, the inherent idea that art is interpretative and holds meaning beyond a superficial level is arguably a universal truth. The metaverse allows artists to explore a new source of income, undoubtedly increasing the volume and popularity of NFTs and other virtual commodities. Such a cultural movement illustrates the significance of this case; and while it originates in the US Southern District of New 91��ɫ, the importance transcends borders. This decision has important implications as to how courts may interpret metaverse-related trademark infringement claims moving forward.

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Anita Gogia is an IPilogue Writer and an incoming 2L JD Candidate at Osgoode Hall Law School.

On February 3^rd 2022 Nike Inc. sued StockX LLC for Nike alleges that StockX is selling unauthorized non-fungible tokens (“NFTs”) of Nike sneakers. ��These issues are novel in their involving the metaverse. This case has the potential to . NFTs are unique digital assets that are of real-world items.

The Nike Suit

Nike claimed that the StockX NFTs were not a collaboration with them, and that they were authorized by Nike to be sold and promoted. Nike argues that the ��use of Nike trademarks are “intentionally deceiving” consumers into believing that these NFTs were Nike-sponsored. Nike has taken steps to venture into the metaverse, having acquired RTFKT Studios, an NFT-creator company, in by selling Nike’s own digital tokens.

Nike claimed trademark dilution, pointing to ��StockX’s heavy use of trademarks in attracting consumers familiar with the Nike brand. Nike argued that the NFTs’ inflated prices and terms of purchase and ownership have led to public criticism and opinion that the . With consumers attributing scams to Nike, the use of Nike’s marks on these NFTs have .

Nike seeks an injunction to stop StockX from selling any NFT products using Nike trademarks, an order of destruction of the infringing NFTs, and an order granting monetary, statutory, and punitive damages.

StockX Vault NFTs

StockX has which can be redeemed for the physical shoes On March 31, 2022, StockX filed a explaining that the NFTs are not sold as virtual assets, but are rather to authenticate physical shoes. StockX also claimed their resale methods are protected by the and their use of Nike products tied to NFTs are .

Recent Developments

On May 10^th 2022, Nike in support of its motion for leave to file a first amended complaint in a revised lawsuit. In addition to the previous causes of action, claims against StockX. Nike purchased four pairs of shoes from StockX that were supposedly “verified to be authentic,” but turned out to be counterfeit — one of which matched a StockX NFT. In particular, Nike explained in the that the counterfeit shoes had StockX’s “Verified Authentic” hangtag and came with a receipt from StockX stating that the shoes were “100% Authentic.”

The StockX slogan, “Buy/Sell Authentic Guaranteed” gives consumers a promise for verified products through their authentication services. In a StockX expressed that they take “customer protection extremely seriously” and “invested millions to fight the proliferation of counterfeit products.” StockX has previously responded that Nike’s claims are

Nike’s case depends on whether StockX can prove that the NFTs are a form of proof of ownership rather than virtual assets themselves. StockX responded that the redemption process merely illustrates that they are not virtual assets. This distinction may be in which an artist was sued for selling NFTs depicting the Birkin Bag and calling it “METABIRKINS” — see previous article . Since shoe ownership can change by trading the NFTs, StockX also demonstrates that their NFTs provide a sustainable solution to selling collectibles, as the shoes are not repeatedly shipped between consumers and StockX for authentication — the NFTs are already correlated to a specific product authenticated by StockX.

Nike that the NFTs are virtual assets as a redemption process is currently unavailable. Nike claims StockX is . For , a physical pair of Nike Dunk Lows are $282 on StockX, yet the StockX NFT linked to this shoe has traded for over $3,000.

Nike currently has multiple pending trademark applications for their NFTs. This case will be a significant development in solving metaverse-related legal issues, and may clarify the boundaries of NFT trademark-usage.

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Nikita Munjal is an IP Innovation Clinic Fellow and a third-year JD/MBA Candidate at Osgoode Hall Law School. This article was written as a requirement for Prof. Pina D’Agostino’s Directed Reading: IP Innovation Program course.

Artists in the digital space have always been vulnerable to the unauthorized distribution, copying, and sale of their work. Still, the for creating non-fungible tokens (NFT) has accelerated the . Listing someone else’s artwork on an NFT marketplace is as simple as saving a copy of the work from an artist’s website or social media platform and uploading it onto a marketplace where it is minted into an NFT. The rampant theft has forced some artists to , limiting the ability of artists to profit from the commercialization of their IP.

What Can Artists Do When Someone Else Mints their Work into an NFT?

Copyright law provides recourse to authors who feel their work has been minted into an NFT without permission, but as copyright attorney cautions, “IP considerations get very complex very quickly.” The author of a copyright-protected work can bring a claim for copyright infringement, but this is contingent on knowing the infringer’s identity. Many NFT marketplaces do not require the person listing the piece to provide proof of ownership or personal information. Alternatively, authors can inform marketplaces of copyright infringement and request the removal of infringing content. Some marketplaces, like OpenSea, provide artists with a when they suspect someone is infringing their IP. However, this mechanism places the burden on artists to monitor marketplaces for infringement and is given the number of requests OpenSea receives to take down listings.

What Can Be Done?

Various stakeholders that can implement changes to reduce the likelihood of thieves profiting from the commercialization of others’ IP. First, marketplaces should partner with companies like DeviantArt, which have created to scan public blockchains and third-party marketplaces and inform users of any potential infringement. This recommendation would still require artists to verify the results and report an infringement to marketplaces. However, artists would be aware of the infringement and could use their platforms to inform consumers of the scam. Second, marketplaces need to overhaul their process for verifying listings. For example, , it updated its requirements for listers to “provide their names, a photo of themselves, proof of them creating the work, and a digital portfolio.” Third, consumers should do their due diligence by reaching out to artists to verify the authenticity of the NFT before purchasing. Alternatively, consumers should purchase from auction houses like Christie’s or Sotheby’s to reduce the likelihood of buying a fake.

Incorporating these changes will require significant investment from stakeholders. However, since art is a cultural tool and an economic driver, those who create work should be protected by all invested stakeholders.

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Photo by Milad Fakurian ()

Pankhuri Malik is an IPilogue Writer and an LLM Student at Osgoode Hall Law School.

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I attended the Global Online Thesis Topic Meetings (“GOTTMs”) hosted by Leiden University on April 5, 2022. Prof. of Leiden University moderated this discussion on non-fungible tokens (“NFTs”) and intellectual property (“IP”), which featured three speakers—, , and —who discussed different aspects of NFTs through their individual presentations.

Richard Z. Lehv

Richard Z. Lehv is a senior litigation counsel at Fross Zelnick Lehrman & Zissu, P.C. His presentation, titled “What an IP Lawyer Needs to Know about the Colorful World of NFTs”, discussed the current NFTs’ landscape globally. He began with a general overview of NFT and blockchain technology and proceeded to discuss many interesting NFT trade examples from the past two years.

He explained that an NFT typically includes only information about the artwork’s location. The actual artwork is not stored within the NFT because storing large amounts of data on a blockchain is fairly expensive. He also discussed the novelty of owning or creating an NFT, rights acquired by purchase, and open NFT trade sources like , , and . Lehv pointed out that purchasing an NFT does not necessarily include copyright assignment, and therefore, returns from the NFT are limited to resale.

Lehv proceeded to discuss interesting examples of NFTs. He spoke about , which are collectibles featuring one or more NBA players with their statistics. Think basketball cards, but virtual! Other examples of NFTs include (sold for a total of $3.1 million USD) and 2021.

My biggest takeaway from the discussion was the range of possibilities that NFTs’ creation and trade present. My favourite example is the virtual artist photograph. She received a cease-and-desist notice from the photographer Michael Halsband, directing her to destroy the artwork. In response, she filmed herself painting over it with black spray paint and converted the video into an NFT.

Dr. Andres Guadamuz

Guadamuz is a reader in intellectual property law at the and the editor-in-chief of the . He authored “”. Guadamuz has also created and sold many NFTs and so, in addition to law, he provided answers on the business side of the trade.

Guadamuz was a critic of NFTs since 2011 and only got involved in their trade to understand what the fuss was all about. He said that most people lose money trading NFTs. According to the statistics he presented, the average price for NFT sales is less than $15 per NFT for 75 percent of the assets. He also said that the top ten percent of NFTs’ traders comprise 85 percent of total transactions. He said since the asset is only a photograph/video, which is usually transferred without the underlying copyright, or other rights in the underlying asset, there is only so much to gain from purchasing an NFT. He also briefly touched upon the high prevalence of fraud in NFT trades.

Alexandra Giannoloulou

Alexandra Giannoloulou is a postdoctoral researcher at the Blockchain and Society Policy Research Lab at the University of Amsterdam’s Institute for Information Law. She co-authored “”.

Due to paucity of time, Giannoloulou was only able to discuss NFT marketplaces and copyright management therein. She discussed three types of NFT intermediaries: open marketplaces (e.g., Opensea), collection-based marketplaces (e.g., NBA Top Shots), and curated marketplaces (e.g., SuperRare). She also discussed copyright licensing by intermediaries necessary for creating and trading NFTs. She discussed this topic in greater detail in her aforementioned paper.

What I Am Taking Home

NFTs are not a new concept; they have existed since , but only recently blew up during the pandemic. This discussion, however, did make me wonder if NFTs are as valuable an asset as they currently appear. The crossover with IP rights is unreliable at best, and breach of obligations by buyer or seller in the trade can only be mitigated through breach of contract remedies. As such, both future incentives and remedies for loss seem dubious.

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Photo by C D-X ( )

Sally Yoon is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

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On February 4, the to HitPiece.com’s lawyer and its founders, demanding that it stops infringing music creators’ intellectual property rights.

HitPiece.com was generating controversy prior to the demand letter, with several users calling it a scam NFT site. (“NFTs") are one-of-a-kind tokens stored on blockchain that can be sold and traded. As NFTs have gained popularity, . These sites use strategies like the and to drain cyptocurrency from fans’ wallets. Several musicians have over their songs being auctioned as NFTs without their knowledge, resulting in the site’s response on :

“Clearly we have struck a nerve and are very eager to create the ideal experience for music fans. To be clear, artists get paid when digital goods are sold on HitPiece. Like all beta products, we are continuing to listen to all user feedback and are committed to evolving the product to fit the needs of the artists, labels, and fans alike.” (also pictured below)

Tweet by @joinhitpiece, available at: .

The site is now offline, but the RIAA made it clear that this will not “absolve [HitPiece.com] of liability for their prior conduct.” The letter, which describes the site’s actions as “outright theft” and “outrageous as it is brazen,” further demands that HitPiece.com “provide[s] a complete listing of site activities and revenues to date, and account for all NFTs and artwork auctioned off.”

Music NFTs Create New Possibilities for Artists

Music NFTs come in various forms, including but not limited to audio files, concert tickets, and merchandise. In addition, music NFT marketplaces, , enable musical works to be and monetized, giving fans unique ownership over music.

The traditional music industry has long experienced issues with artists not receiving their deserved share of revenue from their music, which is split between various people including record labels and producers. Moreover, with music consumption shifting primarily to digital via streaming sites during the pandemic, artists were found to be —that is 250 streams to earn a dollar. NFTs offer a potential solution to this longstanding problem.��By cutting out the streaming platforms and selling directly to fans, NFTs allow artists to receive most of the revenue from their work.

A is particularly beneficial to new artists since it helps them mint their first NFTs and establish a consistent demand for their works. Through the platform, musicians can raise the amount of money they would have received as an advance from a major label. Additionally, famous artists like Snoop Dogg have used NFTs to improve their relationship with fans and explore new to engage with them.

Concerns Regarding Music NFTs

Despite the upsides, , especially as they continue to grapple with issues of unauthorized use. Within a week of the HitPiece controversy, users exposed offering artists’ music on its site without their permission.

In many cases, works being turned into NFTs already exist in other forms, so individuals should be careful when making use of these works as an NFT and consider . Whenever dealing with third parties that own or control works, individuals must ensure that the third party has provided the rights necessary for the work to be included in an NFT.

Looking Forward

NFTs could enable the creation of valuable works in the music industry and provide artists with the opportunity to interact and engage with their audience in novel ways. However, scam NFT sites like HitPiece.com show how easily copyright infringement can occur, turning some of the primary advantages of music NFTs on their head. Therefore, respective trade organizations ought to respond to scams with a speed that matches that of the growing NFT market. As we continue to traverse through the early world of NFTs, riddled with unanswered questions, users and creators must continue to keep relevant legal considerations in mind.

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Photo by Hermes Rivera ()

Shawn Dhue is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

For those of you like me who have survived this long asking the question “what is an NFT?” and requiring someone to repeat their answer after you zoned out, here is the definition:

(“”): a digital asset that represents real-world objects like art, music, in-game items, and videos. They are bought and sold online, frequently with cryptocurrency, and are generally encoded with the same underlying software as many cryptos.

Usually brought up with an example of a picture, this phenomenon is making a pretty big debut at the beginning of this decade. Like with many new technologies these days, the laws around NFTs are constantly updating to accommodate this new concept of digital assets. This is all to say that this recent lawsuit filed will once again change NFT’s meaning.

through NFTs. The mega shoe brand alleges that these sales will confuse customers.

is a that sells sneakers, streetwear, electronics, and other daily accessories. What makes this marketplace different from the others is its business of selling NFTs linked to physical goods. Buyers purchase the NFT, which can be sold for the physical item in the image or traded as a digital good.

Here is the confusing part. When StockX sells these NFTs, the NFT is often a picture of the item made by another company—. Therefore, Nike claims that the sale of the NFT of a Nike product constitutes a trademark infringement, trademark dilution, false designation of origin, and many other unauthorized use violations.

. In addition to destroying these NFTs, Nike is asking for damages for all related sales and for StockX to stop selling any NFTs related to the Nike brand.

The lawsuit so far contains many harsh comments about StockX, including that it “, but rather by .”

StockX responded to the lawsuit by saying that NFTs are a “” and that they will be fighting the claim in court.

Regarding StockX’s comment, I believe it is true that NFTs, a new concept that has taken society by storm in the last two years, continue to grow. This type of lawsuit was bound to happen, and the intellectual property law sector needs answers. Unfortunately, Nike and StockX happen to be the parties which must go through the legal process to benefit others. It will be interesting to see the outcome as the decision will likely set a precedent and change how many global companies conduct business.

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