- GM, we have two new IP lawsuits involving NFTs to report:
- (1) Nike v. StockX, and
- (2) Free Holdings v. McCoy, Sotheby’s.
- Both lawsuits were filed in the Southern District of New York, which already has the lawsuit involving Hermes v. Rothschild. The Central District of California has the lawsuit Miramax v. Tarantino.
- Nike v. StockX: unauthorized selling of NFTs of Nike sneakers
- During recent interviews with CNBC and Bloomberg related to the lawsuit Hermes v. Rothschild over the defendant’s unauthorized use of “Birkin” bag trademarks in MetaBirkin NFTs, depicting Birkin bags covered in faux fur in a digital image, I used the example of someone making “MetaNikes” and selling NFTs of virtual Nike sneakers covered with faux fur.
- Well, I guess truth is stranger than fiction. StockX, a reseller, is already producing NFTs of virtual Nike sneakers and selling them. You can buy the NFTs at StockX’s Vault, which says: “These exclusive NFTs connect coveted physical products with investable digital assets, from sneakers to creators to experiences and more.” Apparently, the NFTs come with physical sneakers being resold.
- Free Holdings v. McCoy, Sotheby’s: ownership of NFT for “Quantum”–reportedly the first ever NFT created–produced by artist Kevin McCoy in 2014 on NameCoin blockchain, but not renewed for 7 years until Early NFT renewed the registration on April 5, 2021 and now claims ownership rights.
- This case is fascinating. It arises because the NFT was created before ERC-721, using the NameCoin blockchain. According to Ledger Insights, an NFT created on NameCoin had to be renewed every 250 days. Sounds inefficient, no?
- Well, the artist McCoy apparently failed to renew the NFT on NameCoin for nearly 7 years!
- After Axios ran a story on “Quantum” in April 2020, an enterprising person with the Twitter handle @EarlyNFT claimed the registration of the dormant NFT for “Quantum.” (We need to research further whether that’s what the norms of NameCoin allowed: did it allow third parties to claim unrenewed NFTs like lost or abandoned property??)
- Well, in June 2021, you guessed it: McCoy sold the NFT at a Sotheby’s auction for $1.47M.
- Now, a Canadian company called Free Holdings, apparently connected with @EarlyNFT is suing McCoy, Sotheby’s, and Nameless, the company that reviewed the provenance of the NFT for Sotheby’s to clear it for auction.
- Plaintiff Free Holdings’ theory of ownership over the Quantum NFT is stated as follows in the Complaint:
- To read the entire Complaint:
- Here’s the Complaint in Nike v. StockX.