A newly unsealed order in Nike’slawsuit against StockX over NFTs and fake sneakers compels the sneaker brand to produce more information about how it identifies counterfeit products, how prevalent they are on other secondary markets, and its authentication reports. The order from Judge Sarah Netburn just became public this week after being filed on April 7.
In February 2022, Nike filed a lawsuit against StockX alleging that the resale marketplace was using its trademarks in the form of NFTs without Nike’s permission. The lawsuit has dragged on and now includes allegations from Nike that StockX knowingly sells counterfeit sneakers on its platform.
The court asked Nike in December 2022 to provide documents related to any “secondary visual inspection” process that aids the company in determining the legitimacy of its sneakers. StockX says that Nike failed to comply with that order and did provide sufficient documentation around how it inspects counterfeits.
Judge Netburn wrote that it’s possible Nike too narrowly interpreted the order and now must submit more information about fakes in the market.
“Nike must produce documents it uses, creates, or distributes that describe or identify possible ‘tells’ of counterfeit products,” the order reads, “even if the purpose of these materials is not to assist in an inspection by the reviewer but to trigger a more fulsome investigation by Nike.”
Additionally, the court has ordered Nike to produce documents on its awareness of counterfeit products on secondary markets other than on StockX. Witnesses in the case have testified about monthly authentication reports that Nike gets from an outside vendor, and the court has now ordered that Nike must produce the reports.
“We are pleased with the Court’s decision on this matter and look forward to reviewing the relevant documentation from Nike,” a spokesperson for StockX said. “We remain confident in our legal defenses and stand by our verification process as one of the first and best in the industry. “
