Nike and StockX Settle Three-Year Legal Battle Over NFTs and Trademark Misuse

Nike and StockX have settled a three-year legal battle over NFTs tied to physical sneakers. The case started when StockX launched Vault NFTs showing Nike shoes, which Nike claimed could mislead customers. Both sides agreed to drop the case with prejudice, avoiding a public trial and saving time and money. The settlement sends a message for platforms creating NFTs tied to physical products to tread carefully when blending real-world brands with blockchain tokens.

Nike Inc. and StockX, a Detroit-based online marketplace, have settled a three-year legal battle over NFTs tied to physical sneakers. The case began in the Southern District of New York in February 2022, when Nike accused StockX of trademark infringement and dilution, alleging that its "Vault" NFTs used Nike sneaker images without authorization to sell tokens tied to physical shoes [1].

Nike argued that the NFTs were likely to confuse consumers and create a false association between the products, thereby diluting its trademarks. StockX countered that its Vault NFTs were designed to track ownership of frequently traded physical products and did not intend to mislead consumers [1].

The case took a significant turn in March 2025 when Judge Valerie Caproni granted Nike partial summary judgment, finding StockX liable for distributing counterfeit goods tied to four pairs of shoes sold to Nike’s investigators and 33 pairs sold to a customer named Roy Kim [2]. The ruling left other claims unresolved and set the case for trial.

However, the parties reached a settlement in late August, which dismissed all claims with prejudice and avoided a public trial. The settlement spares StockX the risk of a damaging verdict while allowing Nike to avoid the uncertainty of putting its brand protection strategy before a jury [1].

The settlement sends a strong message to platforms creating NFTs tied to physical products. It underscores the importance of adhering to brand control and intellectual property compliance. According to Dan Dadybayo, research and strategy lead at Unstoppable Wallet, the settlement reinforces that NFTs functioning as receipts for physical goods will survive, but tokens drifting into standalone collectibles without brand approval will face legal pressure. Additionally, Hank Huang, CEO of Kronos Research, noted that trademark rights have become essential for building credible, compliant platforms as the tokenized collectible market enters a more disciplined phase [1].

The settlement also aligns with a broader trend in the legal recognition of NFTs as goods protected under trademark law. The Ninth Circuit, in a landmark decision, ruled that NFTs are not just digital collectibles but legally recognized goods under the Lanham Act. This ruling, in Yuga Labs, Inc. v. Ryder Ripps and Jeremy Cahen, recognized that NFTs are commercial products with tangible value subject to trademark protection [3].

The Nike-StockX settlement and the Ninth Circuit ruling signal a shift in the legal landscape for NFTs. Platforms creating NFTs tied to physical products must now tread carefully and ensure compliance with trademark laws to avoid legal challenges. As the market for tokenized collectibles becomes more regulated, investors and financial professionals should expect a greater emphasis on brand-approved NFTs and a decrease in tolerance for gray-area resale platforms.

References:
[1] https://finance.yahoo.com/news/nike-stockx-end-trademark-clash-061835044.html
[2] https://decrypt.co/337472/nike-stockx-end-trademark-clash-nfts-fake-shoes
[3] https://www.crowell.com/en/insights/client-alerts/9th-circuit-marches-forward-to-the-future-finding-digital-assets-are-protected-under-trademark-law