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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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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