withdrawal with prejudice and 37 counterfeit pairs at the center of the case

Agreement filed on August 29, 2025, in New York and closure of the dispute between Nike and StockX before the anticipated proceedings: the case concludes with dismissal with prejudice of all claims.

The decision remains on record, confirmed by Reuters and court documents related to federal case 1:22‑cv‑00983, which verified the sale of 37 pairs of counterfeit sneakers, a crucial element for the marketplace and brand protection in the digital realm.

It should be noted that the issue is not only legal but also operational.

According to the data collected by our editorial team from the federal docket (1:22‑cv‑00983) and public court documents, the issue of the 37 pairs emerged during the discovery phases and impacted the trial schedule.

Industry analysts note that, following similar rulings, platforms have on average implemented stricter authentication controls within 12–18 months from the public exposure of the litigation, as seen in similar cases discussed in this in-depth analysis.

• What happened: out-of-court settlement, no hearing, case dismissed with preclusion of new actions on the same facts.
• Where: at the Federal Court of the Southern District of New York, case file 1:22‑cv‑00983.
• Why it matters: it sets a practical precedent on how to handle NFTs linked to physical assets and the responsibilities of platforms.

Deal closed in New York: what’s inside

With the filing of the agreement on August 29, 2025, the parties closed the dispute through a dismissal with prejudice, which prevents reopening the same dispute.

The resolution avoided a public verdict, reduced legal costs, and minimized the risk of reputational damage. The economic terms were not disclosed, likely due to confidentiality clauses, a common practice in NFT and intellectual property disputes, as explained in this article.

In this context, the previously scheduled legal proceeding was canceled.

Essential Timeline

• 2022 – Nike sues StockX for the use of sneaker images in the “Vault” NFT collection.
• March 2025 – An order by Judge Valerie E. Caproni confirmed the sale of 37 pairs of counterfeit sneakers linked to transactions on the platform; other matters had been deferred to trial.
• August 29, 2025 – Settlement and dismissal with prejudice in SDNY: the scheduled trial does not take place.

What the provision says

The ordinance recognized liability for the sale of 37 pairs of non-authentic sneakers, which emerged during the checks. Some key aspects remain to be defined, including the use of the trademark in NFTs and potential consumer confusion.

An interesting aspect is that these points did not receive a final judgment, as they were surpassed by the out-of-court settlement. A similar case that delves into the legal profiles of NFTs is available in this analysis.

The controversial issue: NFT-receipts or digital products

The heart of the dispute concerned the nature of the “Vault” NFTs. For Nike, the use of distinctive signs in the tokens produced an unauthorized endorsement effect, potentially misleading about the brand’s actual involvement.

For StockX, however, the NFTs served as digital receipts linked to stored physical goods, tools for traceability and not standalone products.

In the absence of uniform regulatory guidelines, the case shows how platforms must balance information and promotion in the display of third-party trademarks. An in-depth look at NFT regulations is available here.

Impact on Brands and Marketplaces

• Tighter controls on the supply chain and authentications when NFTs and physical goods are connected.
• Informative design of digital assets: avoid elements that may suggest a non-existent sponsorship or partnership.
• Risk management: implement verification logs, audits conducted by third parties, and rapid take‑down procedures in case of counterfeiting.

Recommended Measures for Protecting Intellectual Property in the Digital Space

• Extend registrations to include digital assets, certifications, and marketplace services.
• Contractual clauses specific to the use of trademarks, image rights, and usage limits in smart contracts.
• On-chain watermarking and verification systems that uniquely associate tokens and physical assets.
• Anti-counterfeiting policy with defined escalation and collaboration with brand protection experts.
• Due diligence on sellers and creators, with automatic suspension thresholds in case of detected anomalies.

Risks and Responsibilities in the Digital Sneaker Market

The case highlights how a poorly regulated ecosystem can foster counterfeiting, litigation, and increased liability for platforms.

The agreed closure, while avoiding a definitive legal precedent, confirms that intermediation does not exempt from the duty of oversight. In practice, the tolerance threshold for authentication errors is significantly reduced.

What changes today

• Clearer standards for the connection between NFTs and physical assets: more transparency is needed on ownership, custody, and rights.
• Supervisory burden for marketplaces: it is now essential to implement pre-screening practices and post-sale checks.
• Prudent communication: the views and descriptions of digital assets must avoid ambiguous messages about the actual affiliation with the brand.

What remains open

Numerous aspects remain without a definitive ruling: for example, when does an NFT constitute a commercial use of the trademark? What is the boundary of the first sale and how do exemptions apply in the digital realm?

The solution, for now, will be defined case by case and will depend on the processes and interfaces adopted by the platforms. It must be said that the balance between innovation and protection remains delicate.