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Nike Wants To 'Destroy' Unauthorized NFTs -- How Will That Work? (decrypt.co) 88

Posted by BeauHD from the uncharted-territory dept.
An anonymous reader quotes a report from Decrypt: When a company like Nike finds someone using its brand without permission, it can ask the courts to order the unauthorized goods to be destroyed. Nike has done this in the past, but its latest trademark lawsuit comes with a twist -- the products it wants to "destroy" are NFTs, which are inscribed permanently on the Ethereum blockchain. The case in question involves Detroit-based StockX, a site that lets people buy and sell used brands, including Nike sneakers. [...] In a complaint filed last month in New York federal court, Nike accused StockX of ripping off its brand in order to cash in on a "gold rush market" for NFTs. As a remedy for StockX's alleged infringement of its trademarks, Nike wants the company to turn over its profits and stop the NFT sneaker sales. It also wants a judge to "order that StockX be required to deliver to Nike for destruction any and all Vault NFTs."

According to Alexandra Roberts, a trademark law professor at the University of New Hampshire, it's fairly common for companies to ask to destroy goods that infringe their IP -- there's even a law that entitles them to do that. But whether a court will grant the order is likely to be informed by what the brand owner is looking to destroy. Where do NFTs fit into this? It's an open question since the courts have never had to address it before. And even if the New York court agrees to order the destruction of the StockX NFTs, there's the question of how exactly Nike would go about doing that.

Records on the blockchain show that StockX has indeed inscribed the NFTs on Ethereum, which means they are indestructible except in the extremely unlikely event that developers agree to fork the blockchain to get rid of them. According to some, the most practical thing for Nike to do would be to send the NFTs to a so-called burner wallet. This wouldn't destroy them but still achieve the same purpose: "This means that the best outcome for a brand that is seeking to have NFTs destroyed may be to have them sent to a burn address, which still does not actually destroy them but renders them incapable of being transferred anymore," writes the Fashion Law Blog.
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Nike Wants To 'Destroy' Unauthorized NFTs -- How Will That Work? More

Nike Wants To 'Destroy' Unauthorized NFTs -- How Will That Work?

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  • From everything I've understood so far, an NFT basically contains the equivalent of a link. It's not like it contains actual image data.

    So couldn't they simply remove whatever was at wherever the NFT was pointing to? That would make them worthless. Or heck, with the NFT market the way it is maybe broken link NFT's 10x in value, but at least then it's no longer tied to any Nike imagery.

    • From everything I've understood so far, an NFT basically contains the equivalent of a link.

      Yeah, this is what DMCA Takedown notices are for. Get the image pulled and the NFT becomes a dead link. If the image is hosted somewhere outside the reach of the DMCA, too bad Nike. Have a good cry over a cup of coffee with the MPAA and RIAA.

      To be honest, I'd love to see NFTs turn into a minefield of intellectual property lawsuits, and like Grumpy Cat said, I hope they both lose.

      • Re: (Score:2)

        by Z00L00K ( 682162 )

        Just generate a lot of cheap NFTs pointing to Nike sites and vendors and they will DMCA themselves, revamp their site all the time - or buy the NFTs to destroy them.
        It will just keep Nike busy for a while.
        Also - if someone is able to figure out how to crack the NFTs then they will be FTs and worthless.

        • It actually costs money to mint NFTs, which is how the scheme really works. A handful of NFTs sell/get wash traded, and then a whole bunch of suckers buy up Ethereum to mint NFTs, thinking they'll cash in on the gold rush. Just like previous gold rushes, the real money is in selling shit to the miners.

      • Re: (Score:2)

        by msauve ( 701917 )
        >this is what DMCA Takedown notices are for.

        So, next up is Nike suing anyone selling sneakers on eBay or Craigslist when they have the audacity of posting a picture of what they're selling? GM suing Autotrader for posting pictures of vehicles for sale? Amazon would be a huge target for everyone.

        Seems like all the value here is the link/contract, which allows the owner to trade it for a pair of shoes. If the link currently points to a picture, Nike _might_ have a weak argument for taking that picture do

        • I'm taking a wild guess that someone took the swoosh, turned it into a NFT image like Bored Apes/Raping Apes/whatever it's called, and the swoosh is being traded amongst drug addled losers as "artwork" for thousands of real dollars. Honestly, I don't really understand it all because it's all bullshit, a giant waste, and I want it all to die soon.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Judging by the missing image in the article that purports to show the NFT, it looks like someone figured this out.

      Silly article. NFTs are indestructible. Lol.

  • To move the tokens to a "burner wallet", I assume you would need the private keys to whatever wallet they are currently in, presumably the wallets of those who have purchased the tokens. It seems like StockX would have to "buy back" the tokens from those who currently have them at whatever price the current owners want to ask. Maybe a court order directing the current owners (assuming one could identify them) to transfer the tokens? Sounds messy, sound complicated, sounds expensive (in either dollars, legal

    • Re: (Score:2)

      by Luckyo ( 1726890 )

      No. You just destroy the link target. I.e. delete the image from where ever that NFT is pointing to.

      • Re: (Score:2)

        by MrL0G1C ( 867445 )

        That's too simple and destroys the cryptofetishists fantasy that NFTs are real and indestructible. I'd prefer the court directly ask for the full destruction of the NFTs to those capable of doing it IE the people running the etherium network because everyone's behaving like crypto-currencies are untouchable and beyond the law, it's time to correct that BS by throwing a few of the founders in to prison for facilitating money-laundering.

        • Re: (Score:2)

          by Luckyo ( 1726890 )

          NFTs are pretty close to being indestructible. But NFT is just a link. Contents of the link are hosted elsewhere.

          • Re: (Score:2)

            by MrL0G1C ( 867445 )

            Indestructible my arse, the people that can fork etherium are the people that can wrote code to do whatever with it.

            • Re: (Score:2)

              by Luckyo ( 1726890 )

              But the old fork remains in your scenario. Forking something doesn't destroy the original. People abandoning the original does.

              • Wait, you mean forking doesn't involve actually sticking a fork in the blockchain and scrambling all the ones and zeros? Well now I've heard just about everything.

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            Most blockchains do have some ability to hold data. You can write information into them. Satoshi did, into the genesis block of bitcoin. But this data and the blockchain itself is "indestructible" like a popular movie on bittorrent. It's tough to get rid of all the copies, but you can suppress it as brutally as you want.

            At some point someone will write something very illegal into a blockchain, probably a little bit at a time. Then that chain will have to be rewritten, or expose everyone who downloads it to

    • NIKE can afford that. And they'll gladly fork over (GET IT!!!) the blockchain if THEIR asses and money is on the line. [wikipedia.org]
      You just have to be rich enough and ask them nicely.

      Or tie them to a radiator and start applying power tools to their sensitive areas - if you're poor. You know... like most NFT suckers out there.

    • To move the tokens to a "burner wallet", I assume you would need the private keys to whatever wallet they are currently in, presumably the wallets of those who have purchased the tokens.

      Normally, yes, but in this case that doesn't seem like it will be a problem since—so far as I can tell—StockX only minted the tokens. They never transferred them to anyone else, so there are no other private keys involved. If you "bought" one of these tokens you weren't actually the owner registered on the Etherium blockchain, and you couldn't trade them outside of StockX's "Vault" system where they maintain their own separate, off-chain "ownership" records. There doesn't seem to be any metadata

  • Nike and other fashion brands are as big as they are because they make and sell products for pennies on the dollar by persuading people that they're somehow better than the cheap alternative. They advertise heavily to turn their mediocre products into "status symbols", to the point that people are so desperate to fit in that markets appear for knock-offs.

    It's hard to feel sorry for companies that make so much money for selling so little, who would fold in a week if it weren't for their pervasive advertising. It follows that it's physically impossible for me to give a single shit when their dilemma involves such an obvious fad/scam as NFTs.

    • Pretty much every company in existence would fold without advertising. The problem is you conflate advertising and putting up billboards or showing 10second clips on Youtube. Advertising and marketing itself is far larger, you walk into a supermarket you did so because of advertising. You'd literally not know where to find a supermarket otherwise, companies pay money to put their name on their buildings. When you do and see the products, that's the result of advertising, companies pay money to put their pro

    • Lets not forget how they manage to make their products for so little. Chinese slave labor.

      The Washington Redskins lost their trademark for less.

      Fuck Nike.

      • Lets not forget how they manage to make their products for so little. Chinese slave labor.

        John Cena does not agree with that statement.

    • Comment removed based on user account deletion
  • For the websites hosting the images and that's the only part anyone gives a rat's ass about. A handful of lunatics who don't understand this is all a scam will be scammed and the vast majority of people doing the scamming will carry on because of good chunk of this is money laundering and tax evasion.

    Nike keeps lawyers on retainer and this is what lawyers do. Hell this is a bonanza to them. It's easy work and you don't have to worry about a backlash since pretty much everyone hates these stupid scams.
    • Except that they're hosted on ipfs which means you'd have to get every anonymous user who's pinning them to unpin them, the lawyers will be earning their money if they make that happen..
      • It's highly unlikely that they're hosted on IPFS in this specific instance, as it's a promotional idea from a company selling shoes. The NFTs are probably just links to images stored on AWS. It'd be trivial to produce a court order for the destruction of the data in the underlying link.

  • If you can buy NFT's, then the court can order them turned over to Nike as property they own. While normally Nike would destroy them, they can instead simply take permanent possession of them.

    Note, the typical reason NIKE destroys counterfeit products is they neither want to own them (taking up warehouse space) nor do they want to sell them, thereby damaging their brand. As NFT's do not take up any significant space (besides a few electrons), owning them does not present a significant problem.

  • The best they can hope for is to get the marketplaces to unlist them.
  • Like most other Nike products.
  • Imaginary property against imaginary property. A fantastic battle.
  • You know your million dollar NFT ?
    It's really just an image file.
    And I have a higher resolution file of the same image.
    So that was a bit of a waste of money.
  • NFTs is a 21st century tulipmania. People are packaging stock photos, emojis and other shit they have no right to up as an NFT and selling them to rubes. When the dust settles all of it with a few exceptions will be absolutely and completely worthless.

    Even the few exceptions are in some instances hilarious. I've seen auctions where someone was selling a physical original song composition (e.g the scrap of paper a Beatles song was composed on) and also 100 NFTs of the picture of it. One of these sales gets

    • I don't think they're at the TulipMania stage. My impression is this is a small group of traders trading NFTs amongst themselves in order to generate hype.

      I don't think people are fooled though. Cryptocurrency - whether legitimate or not - at least appears to have utility. Money is useful after all. NFTs really aren't. Most people don't really want "own" media, and those who do tend to have to be businesses who have to be able to make an actual business case for these purchases.

      There might be something

      • Re: (Score:2)

        by DrXym ( 126579 )
        The one benefit of the NFT scam is its so complicated and fragile as a thing that it is self limiting. Crypto currency is also a scam but at least it's an easy one to convey to people - use this app and use your dollars to buy shitecoins and profit!

    • and also 100 NFTs

      And, why not 1,000,000 NFTs? Maybe they ran out of bits.

      • Re: (Score:2)

        by DrXym ( 126579 )
        Well that's the thing isn't it - if they can sell 100 NFTs then what stopping them selling another 100 more. Maybe they even ran the piece of paper through a scanner a multiple of times so each batch of them is technically a unique image.

  • Can't they put them in their virtual wallets, write the private key on a piece of paper, save to HDD, and throw HDD in the bin, eat the piece of paper? Or do NFTs not work like Bitcoin. I hear enough stories about bitcoin wallets being effectively destroyed (which is to mean they can't ever be accessed or the funds used again). I'm genuinely curious, do NFTs work the same way?

    • NFTs do not work like Bitcoin. They live on chains that support smart contracts. Mostly EVM chains (Ethereum) but lately also Solana and some others. All you can do with bitcoin is send funds from one address to another, there is no native Bitcoin concept of tokens.

      That said, you can send a token to black hole and it will be unaccessible but will still exist on the chain.

  • Doesn't this mean that entire blockchains are vulnerable to legal action? What if a court someday decides to order that data be deleted from a blockchain? This might be hugely inconvenient for large numbers of people but the law sometimes doesn't care about that. It's like when a company or government body is required to delete all their copies of certain data but there's no way to delete it from things like their offsite archives without physically retrieving and rewriting huge datasets.

    • I don't see how a judge can order ETH accounts to spend money to burn their own tokens. Mostly because ETH accounts are not legal entities. They certainly couldn't enforce it.

      • Re: (Score:2)

        by jaa101 ( 627731 )

        The blockchain itself is stored by legal entities. If a court orders the entities to delete something on the chain then, barring successful appeals, that's what they'll have to do. This isn't like ordering someone to decrypt something for which they don't have the key, because deleting something from a blockchain is definitely possible. Worst case: you just delete the whole thing.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Yes they very much potentially are. If not the chain itself than at least the ability for anyone to legally access it within a given governed region certainly is.

      All should reasonably take is for someone to embed a tiny kiddie porn gif or something along those lines and accessing the chain could be come a crime. It would effectively deny it to entire market places.

  • No? Then shut the hell up Nike. You have nothing to complain about, you fucking slavers. We could dismantle your entire operation for your crimes against humanity, and damn well should.

  • The best solution is to delete the etherium and bitcoin journals.
    There was never a guarantee it would be around or anyone would get anything out of it in the first place. Easy come, easy go.

    So, want to buy more Etherium or Bitcoin?

  • What's the point of buying NFT sneakers? Even though NFT is more or less indestructible, it's just a link, and even investing in crypto is more rational. There are even tools like Bitcode AI [bitcodeai.net] that help people profit from trading, so I see no point in NFTs, and for me, this technology is not promising at all.
  • Its nice to have a good mix â" personally I disregarded follow/nofollow 2-3 years back Nice Article [thevesign.com]

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