Areeb Daimee is a 2L JD candidate at the University of Western Ontario Faculty of Law.

With the rise of significant non-fungible token (“NFT”) trademark disputes taking place in the United States, Canada is looking towards the outcomes of those cases in order to interpret Canadian trademark law in relation to NFTs. These disputes are a recent and growing issue in intellectual property law that requires Canadian courts’ examination.

When focusing specifically on prominent trademark infringement disputes, two significant American cases come to mind.

Nike’s suit against StockX

��������� StockX for trademark infringement in February 2022 for selling NFTs of Nike’s products on the StockX online platform. Nike argues that StockX told consumers that tokens would be redeemable for physical shoes.��������� claims that this trademark infringement by StockX is , negatively effecting Nike’s plans to release a line of virtual products.

StockX has made minimal comments on the matter but makes it clear that Nike’s “lacks merit” and is  “a mischaracterization of the service StockX offers” through NFTs.

Hermès’ suit against artist Mason Rothschild

Hermès is in a trademark dispute with artist Mason Rothschild after Rothschild sold multiple digital handbag NFTs. Hermès has for trademark infringement, trademark dilution and false designations of origins and representations amongst other claims against Mason Rothschild.

In response, Rothschild has that he has protection under the First Amendment, describing the NFTs as just “ “a playful abstraction.”

The Future of Canadian Trademark Law

Both cases are still ongoing and Canadian courts and IP lawyers are waiting for the outcomes of various NFT disputes from ‘south of the border’ to better understand how to apply trademark law to NFT disputes in Canada.

George Kondor, partner at Oyen Wiggs Green & Mutala LLP, explains how significant the outcomes of these cases are for the future of Canadian trademark law.

Kondor that “"there’s nothing in Canadian legislation related to NFTs because they’re generally so new” and that court cases are the best way to crystallize what rights people have with regards to NFT issues. Canadian courts may need to wait for a concrete answer from their U.S counterparts. Kondor did also make clear that nothing is for certain: “”.

What the Future May Hold

The multitude of NFT disputes taking place in U.S Federal Courts will likely influence Canadian courts to follow suit and apply similar interpretations of trademark law. The U.S courts will establish influential decisions which assist Canadian courts in swimming through uncharted waters. Only time will tell what direction the U.S and Canadian courts take in dealing with these unique disputes.

The post Outcomes of Prominent NFT Disputes in the U.S May Give Rise to New Interpretations of Canadian Trademark Law appeared first on IPOsgoode.

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.

The post What legal lines can’t NFTs cross? The Nike v StockX lawsuit may provide answers appeared first on IPOsgoode.

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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