Nike v StockX: Court Rules Marketplace Partially Liable For Sale Of Fake Sneakers; Case Heads To 2025 Trial
In a potentially precedent-setting development for ecommerce marketplaces, a New York district court has handed down a partial summary judgment in the ongoing Nike v. StockX case, ruling that StockX is liable for the sale of 37 pairs of counterfeit sneakers through the platform.
The dispute began in February 2022 when Nike filed a lawsuit against StockX, alleging trademark infringement related to the use of Nike trademarks in non-fungible tokens (NFTs).
Nike claimed that StockX's NFTs, which served as digital receipts for authenticated goods, misled consumers into believing these digital assets were authorized by Nike.
StockX argued that its NFTs serve as digital receipts for authenticated goods, thus not infringing on Nike's trademark rights.
As the case progressed, Nike expanded its claims to include counterfeiting and false advertising, citing the sale of counterfeit Nike products on StockX's platform and StockX's claims about their authentication services.
In the latest court decision, Judge Valerie Caproni ruled that StockX is liable for selling 37 pairs of counterfeit sneakers, but denied Nike's claims of false advertising and other trademark-related allegations as well as denying all of StockX's motions.
Immediately following the ruling, StockX posted the following statement, saying it's a shame that "Nike has...opted to use its resources to pursue meritless, expensive litigation" instead of working with StockX to fight fakes together.
It would appear Judge Caproni would not agree that Nike's claims are meritless as the parties are continuing on to trial later this year for the remaining claims including Trademark Infringement, False Designation of Origin / Unfair Competition, Trademark Dilution, Injury to Business Reputation and Dilution, Common Law Trademark Infringement and Unfair Competition, and False Advertising.
Interestingly, despite casually mentioning in multiple filings that they are not the seller of these goods, it does not appear that StockX pursued a "just a venue" Section 230 based defense strategy, like we have seen in the recent EPA case against eBay.
In that case, the Department of Justice sued eBay on behalf of the Environmental Protection Agency, seeking to hold the company liable for the sale of illegal chemicals, pesticides, and emissions control cheat devices on their platform.
eBay's defense was that Section 230 of the Communications Decency Act of 1996 protected them from liability for the actions of third party sellers - and U.S. District Judge Orelia Merchant agreed, granting eBay's motion to dismiss on Section 230 grounds in September 2024.
The DOJ is currently deciding whether to appeal that decision, which if allowed to stand will provide a strong precedent for other online marketplaces looking to use Section 230 as a "get out of liability free" card.
Liz Morton
It's not clear why StockX chose not to pursue that same line of argument in this case, but it may be that because StockX authenticates all products sold through the marketplace, they have a greater degree of involvement in the transaction and/or be considered the creator of any content related to the authenticity of products which could negate arguments for Section 230 protection.
If that is the case, it could have some interesting implications for eBay and other marketplaces which offer similar authentication services for at least some of the products sold on their platforms.
As part of their defense, eBay argued that it is "never itself a seller" and is instead "a pure third-party, peer-to-peer online marketplace."
While it may be true eBay did not directly sell the specific items in question in the EPA lawsuit, their blanket statements saying the company is "never itself a seller" have been demonstrably false at least since August 2023, when eBay set up shop on its own platform as its owned-subsidiary TCGPlayer - which oddly enough does also offer authentication services.
Interestingly, eBay changed TCGPlayer policies and appeared to have stopped selling items under that account the week before the case was dismissed and coincidentally resumed selling on eBay, with a single auction started on February 24th - the same day the DOJ was granted their request for more time to decide whether or not to move forward with this appeal.
That suggests eBay may have been concerned that provably false statement about "never being a seller" could become an issue on appeal or that the FTC under new leadership might look into the anticompetitive concerns the practice raised which were cited in a petition urging the Commission to investigate eBay's acquisition of TCGPlayer.
In a twist of irony, both Nike and StockX were being led by former eBay executives when the lawsuit between the two kicked off in 2022 - ex-eBay CEO John Donahoe was CEO of Nike for 5 years before leaving the company in October, 2024 and former VP eBay Americas Scott Cutler was CEO of StockX for 6 years before departing in December, 2024.
Liz Morton
The case is Nike, Inc. v. Stockx LLC case number 1:22-cv-00983 in US District Court Southern District of New York and will be headed to a trial date yet to be determined between June 15 - November 15 2025.
