The concept of NFTs is misleading Nike and the corporate marketing department might be in jeopardy.
Over the past few months, non-fungible tokens, also known as NFTs, have burst into the public consciousness, expanding and even challenging our collective understanding of digital ownership. NFT refers to the perceived value of any particular collectible or investible item, but the value of each NFT is in the eye of the beholder, and NFTs can be bought or sold based on what others are willing to pay for it. NFTs connect the physical and virtual worlds by leveraging the best of what blockchain has to offer.
But there is one key thing about buying NFTs that most people misunderstand. People don’t understand that when you buy, you have the token. You can display the token and show you own the token, but, you don’t own the copyright to the art that is represented by the token.
Companies like luxury fashion house Hermes and sneaker maker Nike have taken legal action against alleged infringements of their intellectual property in the NFT space. However, the legal ambiguities around the emerging technology make it difficult for companies to assert their claims.
In October, Nike became one of the first brands to file trademark applications for its virtual goods. It filed its logo and “swoosh” trademarks in classes 9, 35 and 41, which encompass downloadable virtual goods, including footwear and clothing; retail store services featuring virtual footwear and clothing; and entertainment services that provide non-downloadable virtual footwear and clothing for use in virtual environments. In January of this year, StockX also filed its logo in the same classes.
Because StockX NFTs include the Nike logo, Nike’s lawsuit alleged that “they are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.”
Nike has yet to launch its own NFTs but has released branded NFTs with digital art studio Rtfkt, which it acquired in late December.
In February, Nike filed a complaint in federal court in Manhattan accusing StockX of “blatantly freeriding” on Nike’s trademarks and goodwill with a new service called Vault NFTs.
StockX contends that its NFTs aren’t virtual sneakers but rather e-commerce listings for physical sneakers that users can buy or sell. The Vault service allows users to trade sneakers instantly without ever taking possession of them, thus eliminating shipping costs and transit times.
Every corporate marketing department in America (and beyond) seems to be piling onto the NFT craze. But sadly for them, most have little impact and are making those businesses seem less relevant rather than the reverse. That’s because every NFT project from Adidas to Campbell’s Soup to Budweiser follows a nearly identical format.
Corporations lean toward the generic or else go too far at being quirky that it feels inauthentic. The crypto community is perceptive, and will pick up on this in genuine effort and label it as either a corporate money grab or a lame attempt at seeming relevant. Companies should think about what makes their brand truly unique and cult-like and need to focus on what those superusers want from an affiliation with its product. From there, it should decide if that is a theme it can use to build a base for its NFT community.