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May 20, 2022

News of the Trade

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Nike accuses StockX of selling fake shoes — after buying its own counterfeit sneakers on the site

The next battle in the ongoing war between Nike
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+4.74%
and online marketplace company Stockx is ramping up.

Nike has amended its suit against StockX to include accusations of selling counterfeit merch labeled as “authentic” on its platform. This comes after Nike says it purchased four pairs of fake shoes from StockX over the last few months, including a pair of Air Jordan 1 High OG “Patent Bred” sneakers. A size 11 pair of these shoes sell for around $340 on the secondary market after taxes and fees are applied.

“Those four pairs of counterfeit shoes were all purchased within a short two-month period on StockX’s platform, all had affixed to them StockX’s ‘Verified Authentic’ hangtag, and all came with a paper receipt from StockX in the shoe box stating that the condition of the shoes is ‘100% Authentic,’” Nike claims in the court filing with the Southern District of New York.

StockX sells shoes, apparel and other items from various brands, including but not limited to Nike, Adidas
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and Under Armour
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The merchandise is not owned by StockX at the time of sale; instead the sale is conducted between two individuals who agree on a price, and StockX acts as a middle man to authenticate the product, for a fee.

“We take customer protection extremely seriously, and we’ve invested millions to fight the proliferation of counterfeit products that virtually every global marketplace faces today,” a StockX spokesperson told MarketWatch. “Nike’s latest filing is not only baseless but also is curious given that their own brand protection team has communicated confidence in our authentication program, and that hundreds of Nike employees – including current senior executives – use StockX to buy and sell products. This latest tactic amounts to nothing more than a panicked and desperate attempt to resuscitate its losing legal case against our innovative Vault NFT program that revolutionizes the way that consumers can buy, store, and sell collectibles safely, efficiently, and sustainably. Nike’s challenge has no merit and clearly demonstrates their lack of understanding of the modern marketplace.”

Representatives from Nike were not immediately available for comment on the new counterfeit allegations.

Nike initially hit StockX with a trademark-infringement lawsuit in February, accusing the company of violating trademark law by selling non-fungible tokens, aka NFTs, with Nike’s logo. in fact, the “Patent Bred” Air Jordan 1 High OG that Nike claims to have to have bought counterfeits of on StockX’s site, is also one of the eight Vault NFTs that StockX is selling — and its best-selling NFT — which Nike claims infringes on its copyright.

When discussing the trademark portion of the lawsuit, StockX claimed Nike had shown a “fundamental misunderstanding” of NFTs by suing them.

After receiving a $3.8 billion valuation, the Detroit-based sneaker resale platform recently tapped Morgan Stanley
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 and Goldman Sachs
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 as it prepares to go public at some point in 2022, according to Bloomberg.