Outcomes of Prominent NFT Disputes in the U.S May Give Rise to New Interpretations of Canadian Trademark Law

Outcomes of Prominent NFT Disputes in the U.S May Give Rise to New Interpretations of Canadian Trademark Law

Areeb Daimee is a 2L JD candidate at the University of Western Ontario Faculty of Law.

With the rise of significant non-fungible token (“NFT”) trademark disputes taking place in the United States, Canada is looking towards the outcomes of those cases in order to interpret Canadian trademark law in relation to NFTs. These disputes are a recent and growing issue in intellectual property law that requires Canadian courts’ examination.

When focusing specifically on prominent trademark infringement disputes, two significant American cases come to mind.

Nike’s suit against StockX

 Nike sued StockX for trademark infringement in February 2022 for selling NFTs of Nike’s products on the StockX online platform. Nike argues that StockX told consumers that tokens would be redeemable for physical shoes. Nike claims that this trademark infringement by StockX is meant to confuse customers, negatively effecting Nike’s plans to release a line of virtual products.

StockX has made minimal comments on the matter but makes it clear that Nike’s claim “lacks merit” and is  “a mischaracterization of the service StockX offers” through NFTs.

Hermès’ suit against artist Mason Rothschild

Hermès is in a trademark dispute with artist Mason Rothschild after Rothschild sold multiple digital handbag NFTs. Hermès has filed for trademark infringement, trademark dilution and false designations of origins and representations amongst other claims against Mason Rothschild.

In response, Rothschild has argued that he has protection under the First Amendment, describing the NFTs as just “ “a playful abstraction.”

The Future of Canadian Trademark Law

Both cases are still ongoing and Canadian courts and IP lawyers are waiting for the outcomes of various NFT disputes from ‘south of the border’ to better understand how to apply trademark law to NFT disputes in Canada.

George Kondor, partner at Oyen Wiggs Green & Mutala LLP, explains how significant the outcomes of these cases are for the future of Canadian trademark law.

Kondor explained that “"there’s nothing in Canadian legislation related to NFTs because they’re generally so new” and that court cases are the best way to crystallize what rights people have with regards to NFT issues. Canadian courts may need to wait for a concrete answer from their U.S counterparts. Kondor did also make clear that nothing is for certain: “…it’s difficult to say how the law will develop around them. There’s lots of uncertainty – but where there’s uncertainty, there’s a need for lawyers”.

What the Future May Hold

The multitude of NFT disputes taking place in U.S Federal Courts will likely influence Canadian courts to follow suit and apply similar interpretations of trademark law. The U.S courts will establish influential decisions which assist Canadian courts in swimming through uncharted waters. Only time will tell what direction the U.S and Canadian courts take in dealing with these unique disputes.