Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 1 of 25
`
`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`Civil Action No.: 1:22-cv-00983-VEC
`
`|||||||||
`
`
`
`NIKE, INC.,
`
`v.
`
`STOCKX LLC,
`
`Plaintiff,
`
`Defendant.
`
`PLAINTIFF NIKE, INC.’S MEMORANDUM OF LAW IN SUPPORT OF
`ITS MOTION FOR LEAVE TO FILE A FIRST AMENDED COMPLAINT
`
`

`

`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 2 of 25
`
`TABLE OF CONTENTS
`
`I. PRELIMINARY STATEMENT ............................................................................................. 1
`II. FACTUAL BACKGROUND.................................................................................................. 4
`III.
`PROCEDURAL HISTORY................................................................................................. 6
`IV. ARGUMENT ....................................................................................................................... 7
`A. Applicable Legal Standard ................................................................................................... 7
`B. Nike Should Be Granted Leave to Amend .......................................................................... 9
`1. Nike’s Did Not Excessively Delay In Filing Its Motion .................................................. 9
`2. Nike’s Motion Is Made In Good Faith And For Legitimate Purpose ............................ 10
`3. Nike’s Proposed Amendment Is Not Futile ................................................................... 11
`4. Nike’s Proposed Amendment Will Not Unduly Prejudice StockX ............................... 14
`V. CONCLUSION ..................................................................................................................... 18
`
`i
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 3 of 25
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`A.V. by Versace, Inc. v. Gianni Versace, S.p.A.,
`87 F. Supp. 2d 281 (S.D.N.Y. 2000)..................................................................................16, 17
`
`Agerbrink v. Model Serv. LLC,
`155 F. Supp. 3d 448 (S.D.N.Y. 2016).............................................................................. passim
`
`Altowaiti v. Cissna,
`2020 WL 2036703 (S.D.N.Y. Apr. 28, 2020)............................................................................8
`
`Am. Med. Ass'n v. United Healthcare Corp.,
`2006 WL 3833440 (S.D.N.Y. Dec. 29, 2006) .........................................................................11
`
`Apotex Corp. v. Hospira Healthcare India Priv. Ltd.,
`2019 WL 3066328 (S.D.N.Y. July 12, 2019) ..........................................................................10
`
`Artists Rts. Enf't Corp. v. Est. of King,
`2017 WL 2062988 (S.D.N.Y. May 15, 2017) ...........................................................................9
`
`Bemben v. Fuji Photo Film U.S.A., Inc.,
`2003 WL 21146709 (S.D.N.Y. May 19, 2003) .........................................................................8
`
`Block v. First Blood Assocs.,
`988 F.2d 344 (2d Cir. 1993).....................................................................................................16
`
`Bodum Holding AG v. Starbucks Corp.,
`2020 WL 6135714 (S.D.N.Y. Oct. 16, 2020) ..........................................................................16
`
`Chanel, Inc. v. RealReal, Inc.,
`449 F. Supp. 3d 422 (S.D.N.Y. 2020)................................................................................12, 13
`
`Christians of Cal., Inc. v. Clive Christian N.Y., LLP,
`2014 WL 3605526 (S.D.N.Y. July 18, 2014) ..........................................................................16
`
`Cmty. Ass'n Underwriters of Am., Inc. v. Main Line Fire Prot. Corp.,
`2020 WL 5089444 (S.D.N.Y. Aug. 28, 2020) .........................................................................12
`
`Conopco Inc. v. Wells Enterprises, Inc.,
`2015 WL 2330115 (S.D.N.Y. May 14, 2015) .........................................................................14
`
`DGI-BNSF Corp. v. TRT LeaseCo, LLC,
`2019 WL 5781973 (S.D.N.Y. Nov. 6, 2019) (Caproni, J.) ..................................................7, 11
`
`ii
`
`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 4 of 25
`
`Dube v. Signet Jewelers Ltd.,
`2017 WL 1743853 (S.D.N.Y. May 4, 2017) ...........................................................................11
`
`El Greco Leather Prod. Co. v. Shoe World, Inc.,
`806 F.2d 392 (2d Cir. 1986).....................................................................................................10
`
`Eliya, Inc. v. Steven Madden, Ltd.,
`2017 WL 1190943 (E.D.N.Y. Mar. 30, 2017) .........................................................................18
`
`Friedl v. City of New York,
`210 F.3d 79 (2d Cir. 2000)). ......................................................................................................7
`
`Grochowski v. Phoenix Constr.,
`318 F.3d 80 (2d Cir. 2003).......................................................................................................15
`
`Gucci Am., Inc. v. Guess
`?, Inc., 868 F. Supp. 2d 207 (S.D.N.Y. 2012) .........................................................................11
`
`Gurvey v. Cowan, Liebowitz & Latman, P.C.,
`2013 WL 3718071 (S.D.N.Y. July 15, 2013) ..........................................................................11
`
`Hanlin v. Mitchelson,
`794 F.2d 834 (2d Cir. 1986).....................................................................................................15
`
`Ideavillage Prod. Corp. v. Copper Compression Brands LLC,
`2021 WL 5013799 (S.D.N.Y. Oct. 27, 2021) ..........................................................................17
`
`JPMorgan Chase Bank, N.A. v. IDW Group, LLC,
`2009 WL 1357946 (S.D.N.Y. May 12, 2009) .........................................................................17
`
`In re Keurig Green Mountain Single-Serve Coffee Antitrust Litig.,
`383 F. Supp. 3d 187 (S.D.N.Y. 2019)......................................................................................14
`
`Kleeberg v. Eber,
`331 F.R.D. 302 (S.D.N.Y. 2019) ...........................................................................................8, 9
`
`Lemberg L., LLC v. eGeneration Mktg., Inc.,
`2020 WL 2813177 (D. Conn. May 29, 2020) ..........................................................................14
`
`Levin v. Bank of New York,
`2020 WL 8812043 (S.D.N.Y. Dec. 10, 2020) .................................................................8, 9, 12
`
`LivePerson, Inc. v. 24/7 Customer, Inc.,
`83 F. Supp. 3d 501 (S.D.N.Y. 2015)........................................................................................14
`
`Loftex USA LLC v. Trident Ltd.,
`2012 WL 5877427 (S.D.N.Y. Nov. 20, 2012) .........................................................................10
`
`iii
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 5 of 25
`
`Louis Vuitton Malletier, S.A. v. My Other Bag, Inc.,
`2018 WL 317850 (S.D.N.Y. Jan. 8, 2018), aff'd, 764 F. App'x 39 (2d Cir.
`2019) ..................................................................................................................................10, 11
`
`United States ex rel. Mar. Admin. v. Cont'l Ill. Nat'l Bank & Tr. Co. of Chi.,
`889 F.2d 1248 (2d Cir. 1989)...................................................................................................16
`
`Margel v. E.G.L. Gem Lab Ltd.,
`2010 WL 445192 (S.D.N.Y. Feb. 8, 2010) ...................................................................... passim
`
`Milanese v. Rust-Oleum Corp.,
`244 F.3d 104 (2d Cir. 2001).................................................................................................7, 11
`
`Monahan v. New York City Dep't of Corr.,
`214 F.3d 275 (2d Cir. 2000).....................................................................................................15
`
`Nat'l Acad. of Television Arts & Scis., Inc. v. Multimedia Sys. Design, Inc.,
`551 F. Supp. 3d 408 (S.D.N.Y. 2021) (Caproni, J.) ..................................................................2
`
`Oneida Indian Nation of New York v. Cty. of Oneida, N.Y.,
`199 F.R.D. 61 (N.D.N.Y. 2000)...............................................................................................15
`
`Panther Partners Inc. v. Ikanos Commc'ns, Inc.,
`681 F.3d 114 (2d Cir. 2012).....................................................................................................12
`
`Quaratino v. Tiffany & Co.,
`71 F.3d 58 (2d Cir. 1995)...........................................................................................................8
`
`United States ex rel. Raffington v. Bon Secours Health Sys., Inc.,
`285 F.Supp.3d 759 (S.D.N.Y. 2018)....................................................................................7, 12
`
`Refco Grp. Ltd., LLC v. Cantor Fitzgerald,
`2015 WL 4097927 (S.D.N.Y. 2015) ........................................................................................15
`
`Ruotolo v. City of New York,
`514 F.3d 184 (2d Cir. 2008).....................................................................................................15
`
`Sacerdote v. New York Univ.,
`9 F.4th 95 (2d Cir. 2021) .................................................................................................4, 7, 10
`
`Scott v. Chipotle Mexican Grill, Inc.,
`300 F.R.D. 193 (S.D.N.Y.2014) ..............................................................................................16
`
`State Teachers Ret. Bd. v. Fluor Corp.,
`654 F.2d 843 (2d Cir. 1981).....................................................................................................15
`
`Travelers Indem. Co. of Am. v. Starr Indem. & Liab. Co.,
`2022 WL 912700 (S.D.N.Y. Mar. 29, 2022) ...........................................................................12
`
`iv
`
`

`

`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 6 of 25
`
`Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc.,
`2021 WL 240737 (S.D.N.Y. Jan. 25, 2021) (Caproni, J.) .........................................................7
`
`Statutes
`
`15 U.S.C. § 1114(1)(a) .............................................................................................................12, 13
`
`15 U.S.C. § 1125(a)(1)(B) .......................................................................................................12, 13
`
`Lanham Act ........................................................................................................................10, 14, 17
`
`Other Authorities
`
`FED. R. CIV. P. 15(d) ................................................................................................................2, 7, 8
`
`2 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 11:91 (5th ed. 2022) ....................11
`
`v
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 7 of 25
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`Plaintiff Nike, Inc. (“Nike”) respectfully submits this memorandum of law in support of its
`
`Motion for Leave to File a First Amended Complaint (“FAC”) pursuant to Federal Rule of Civil
`
`Procedure 15(a)(2) and (d) (the “Motion”).1 Nike’s Motion is timely made pursuant to the Court’s
`
`April 11, 2022 Civil Case Management Plan and Scheduling Order (the “Order”), which states that
`
`any motion to amend shall be filed within 30 days from the date of the Order. (Dkt. No. 25.)
`
`I.
`
`PRELIMINARY STATEMENT
`
`Nike filed this trademark infringement and dilution action against StockX on February 3,
`
`2022. In the approximately three months since that date, additional facts transpired or were
`
`discovered that are highly relevant to Nike’s claims against StockX. These facts can be grouped
`
`into three categories.
`
`First, since Nike filed its Complaint, StockX has made a series of modifications to its
`
`representations surrounding its Vault NFT offerings. For example, after Nike shined a spotlight
`
`on several problematic and deceptive terms governing the infringing Nike-branded NFTs, StockX
`
`deleted and/or replaced those terms. StockX also modified Vault NFT marketing that, e.g.,
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`promised owners of the infringing Nike-branded NFTs exclusive StockX benefits. Those changes
`
`do nothing to excuse StockX’s ongoing infringement of Nike’s marks or to resolve its past
`
`infringement and, indeed, by the time those modifications were made, StockX had already offered
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`for sale, sold, and/or released into the stream of commerce all of the infringing Nike-branded
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`NFTs. StockX’s revisionary conduct is nonetheless relevant to Nike’s claims, but instead of
`
`admitting that certain terms that existed during a critical infringement period were altered,
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`StockX’s Answer to Nike’s Complaint obfuscated the fact that it scrambled to revise its
`
`1 The proposed FAC is annexed as Exhibit A to the Declaration of Tamar Y. Duvdevani
`(“Duvdevani Decl.”) filed herewith. Pursuant to this Court’s Individual Practices, a redlined
`version of the proposed FAC comparing the revisions made to Nike’s original Complaint is
`annexed as Exhibit B to the Duvdevani Decl.
`
`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 8 of 25
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`representations to consumers in the wake of Nike’s claims of trademark infringement and dilution.2
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`Nike thus proposes allegations in the FAC relating to this recent conduct that supplements Nike’s
`
`original causes of action and “happened after the date” of Nike’s original pleading. FED. R. CIV.
`
`P. 15(d).
`
`Second, on April 22, 2022, Nike entered the NFT market. In particular, Nike and RTFKT
`
`released the Nike Dunk Genesis CryptoKicks™ NFTs, along with the Evo Skin Vial NFTs, which
`
`allow owners of the Nike Dunk Genesis NFTs to customize the colorway of the digital shoes.
`
`Examples of the Nike Dunk Genesis CryptoKicks™ and Evo Skin Vial NFTs are depicted below:
`
`Nike’s original Complaint had alleged that it would soon release its own virtual products. (Dkt.
`
`No. 1 at ¶ 39.) It now has done so. Two key factors in the likelihood of confusion analysis are
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`“proximity of the products and their competitiveness with one another” and “evidence that the
`
`senior user may ‘bridge the gap’ by developing a product for sale in the market of the alleged
`
`infringer’s product.” Nat'l Acad. of Television Arts & Scis., Inc. v. Multimedia Sys. Design, Inc.,
`
`551 F. Supp. 3d 408, 427 (S.D.N.Y. 2021) (Caproni, J.). Sure enough, after Nike’s drop of these
`
`NFTs, additional actual confusion between the parties’ occurred because of StockX’s infringing
`
`2 For example, when Nike alleged a fact regarding a term that StockX later removed after the
`Complaint was filed, StockX did not admit that the term existed during the initial infringement
`period. Instead, StockX denied the allegation and averred its current terms. (See e.g., Dkt. No. 21
`at ¶ 54). Likewise, where StockX later revised a term to address an inconsistency Nike had alleged
`in its initial Complaint, StockX denied the allegation and averred the revised terms without
`acknowledging any such change. (See e.g., id. at ¶ 48).
`2
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 9 of 25
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`Nike-branded NFTs. (Duvdevani Decl. Ex. A at ¶ 104.) Nike thus proposes supplementing its
`
`pleading with highly relevant factual allegations regarding its post-action entry into the NFT
`
`market.
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`Third, when StockX answered Nike’s Complaint, it set forth its defensive contentions in a
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`“Preliminary Statement.” (Dkt. No. 21 at 1-8.) StockX argued in this opening to its answer that
`
`it is not liable because each accused NFT is just a “claim ticket” to a pair of Nike shoes that StockX
`
`authenticated using its “proprietary, multi-step authentication process” and then stored in its
`
`“vault.” (Id. at 3.) But despite StockX’s numerous guarantees of authenticity, Nike recently
`
`obtained four confirmed pairs of counterfeit “Nike” shoes, which were purchased within a two-
`
`month period on StockX’s platform. StockX affixed its “Verified Authentic” hangtag to each pair
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`of counterfeit shoes and included a paper receipt in the shoe box stating that each pair of counterfeit
`
`shoes is “100% Authentic.” At least one pair of those counterfeit shoes are the same style as one
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`of the infringing Nike-branded Vault NFTs:
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`Nike therefore proposes factual allegations regarding StockX’s counterfeiting activities
`
`and its false and/or misleading claims regarding its “proprietary” authentication process. These
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`facts not only supplement Nike’s allegations relating to its original five causes of action, they also
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`3
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 10 of 25
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`support Nike’s proposed sixth cause of action for counterfeiting and seventh cause of action for
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`false advertising.
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`It is well established that motions for leave to amend filed prior to a scheduling order
`
`deadline should be freely granted absent bad faith, prejudice or futility. Sacerdote v. New York
`
`Univ., 9 F.4th 95, 115 (2d Cir. 2021). Because Nike timely filed this Motion pursuant to the
`
`Court’s Civil Case Management Plan and Scheduling Order, and none of the exceptions discussed
`
`below apply, this Motion should be granted.
`
`II.
`
`FACTUAL BACKGROUND
`
`This action arose from StockX’s unauthorized and infringing use of Nike’s famous marks
`
`in connection with StockX’s entry into the Non-Fungible Token (“NFT”) market. (See generally
`
`Dkt. No. 1.) Specifically, without Nike’s authorization or approval, StockX is “minting” NFTs
`
`that prominently use Nike’s trademarks, marketing those NFTs using Nike’s goodwill, and selling
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`those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to
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`believe that those “investible digital assets” (as StockX has called them) are, in fact, authorized by
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`Nike when they are not. (Id.)
`
`For its defense, StockX claims that the “100% Authentic” Nike-branded “Vault NFTs” it
`
`has sold are no more than “claim tickets” for specific physical Nike shoes StockX has purportedly
`
`authenticated using its “proprietary, multi-step authentication process” and stored in its “vault” to
`
`ensure “that the products offered for sale are what they claim to be, and are not counterfeit,
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`defective, or used.” (Dkt. No. 21 at 2.)
`
`In the short time since Nike initiated this action, StockX has repeatedly revised its
`
`statements to consumers, hoping to erase some of the unsavory conduct that Nike’s Complaint
`
`identified. (Duvdevani Decl. Ex. A at¶ 73.) Moreover, the consumer confusion caused by
`
`StockX’s infringement is now affecting Nike’s recent entry into the NFT market with its genuine
`4
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 11 of 25
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`Nike-branded NFTs. After this action was filed, Nike launched the highly anticipated and
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`revolutionary MNLTH and CryptoKicks™ NFTs. (Duvdevani Decl. Ex. A at ¶ 45-46.) Nike and
`
`RTFKT released the Nike Dunk Genesis CryptoKicks™ NFTs on April 22, 2022, along with the
`
`Evo Skin Vial NFTs, which allow owners of the Nike Dunk Genesis NFTs to customize the
`
`colorway of the digital shoes. (Duvdevani Decl. Ex. A at ¶¶ 45-46.) The public has already
`
`conflated the parties’ NFT offerings. (Duvdevani Decl. Ex. A at ¶ 104.) For example, one
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`commentator incorrectly reported that Nike and RTFKT’s CryptoKicks™ NFTs debuted on
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`StockX’s platform (they did not) and that users of StockX’s platform can buy NFTs supported by
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`Nike (they cannot). (Duvdevani Decl. Ex. A at ¶ 104.) This was precisely the sort of confusion
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`that Nike feared would ensue when it filed this action.
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`Nike’s continuing investigation into StockX’s conduct has also revealed that StockX has
`
`been and is currently dealing in counterfeit Nike goods. (Duvdevani Decl. Ex. A at ¶¶ 12-15, 107.)
`
`Notwithstanding StockX’s repeated guarantees that every item sold through its platform is “100%
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`Verified Authentic,” since December 2021 and continuing through the filing of this action, Nike
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`has obtained from StockX four pairs of purportedly “authenticated” Nike-branded shoes that Nike
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`has verified are, in fact, counterfeit. (Duvdevani Decl. Ex. A at ¶¶ 12-13, 107.) Those four pairs
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`of counterfeit shoes were all purchased within a two-month period on StockX’s platform, all had
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`affixed to them StockX’s “Verified Authentic” hangtag, and all came with a paper receipt from
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`StockX in the shoe box stating that the shoes are “100% Authentic.” (Duvdevani Decl. Ex. A at ¶
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`12.) Indeed, at least one pair of those counterfeit shoes are the same style as one of the infringing
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`Nike-branded Vault NFTs. (Duvdevani Decl. Ex. A at ¶ 13.) The confirmed purchase of
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`counterfeit Nike goods on StockX’s platform directly undermines StockX’s “100% Verified
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`Authentic” claims and its claims about the “proprietary multi-step verification process” it employs
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`5
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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 12 of 25
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`to authenticate goods and renders these statements false and/or misleading. (Duvdevani Decl. Ex.
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`A at ¶ 173.) StockX is knowingly deceiving consumers with these false and/or misleading
`
`statements about the authenticity of the Nike goods for sale on its platform, continuing to engage
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`in such improper and unlawful business practices to attract consumers to its platform and induce
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`consumers to purchase supposedly genuine Nike goods and purchase and trade the infringing Nike-
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`branded Vault NFTs. (Duvdevani Decl. Ex. A at ¶ 113.) The continued sale of counterfeit Nike
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`goods on StockX’s platform and StockX’s false and/or misleading claims about its authentication
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`process has caused and is causing Nike injury as a result of, inter alia, harm to reputation, diverted
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`sales, consumer confusion, dilution, and tarnishment of its valuable trademarks. (Duvdevani Decl.
`
`Ex. A at ¶ 114.)
`
`For these reasons, Nike moves this Court for leave to supplement and amend its Complaint
`
`to include additional causes of action for counterfeiting and false advertising.
`
`III.
`
`PROCEDURAL HISTORY
`
`Nike initiated this action by filing its Complaint on February 3, 2022. (Dkt. No. 1.) StockX
`
`filed its Answer to Nike’s Complaint on March 31, 2022. (Dkt. No. 21.) The Court held the Initial
`
`Pretrial Conference on March 11, 2022 and issued its Civil Case Management Plan and Scheduling
`
`Order on the same day. (Dkt. No. 25.) The Order states that any motion to amend shall be filed
`
`within 30 days from the date of the Order. (Id. at ¶ 2.) The parties served Rule 26(a)(1) Initial
`
`Disclosures on April 18, 2022. (Id. at ¶ 3.) Fact discovery closes on October 15, 2022 and expert
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`discovery closes on January 15, 2023. (Id. at ¶ 5.) The parties have exchanged first sets of
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`discovery requests but have not yet begun to produce documents in connection with those requests.
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`A settlement conference before Magistrate Judge Netburn is scheduled for July 18, 2022. (Dkt.
`
`No. 28.)
`
`6
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 13 of 25
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`IV.
`
`ARGUMENT
`
`A.
`
`Applicable Legal Standard
`
`Rule 15(a)(2) of the Federal Rules of Civil Procedure governs amendment of pleadings and
`
`states that a court “should freely give leave [to amend] when justice so requires.” FED. R. CIV. P.
`
`15(a)(2). When plaintiff moves the court for leave to amend, courts in this Circuit “should grant
`
`such leave ‘freely...when justice so requires,’ pursuant to Rule 15(a)(2).” Sacerdote., 9 F.4th at
`
`115. “This is a liberal and permissive standard, and the only grounds on which denial of leave to
`
`amend has long been held proper are upon a showing of undue delay, bad faith, dilatory motive,
`
`or futility.” Id. (internal quotations and citations omitted); see also Valelly v. Merrill Lynch,
`
`Pierce, Fenner & Smith Inc., 2021 WL 240737, at *1 (S.D.N.Y. Jan. 25, 2021) (Caproni, J.)
`
`(“Leave to amend should only be denied if there is ‘substantial reason to do so, such as excessive
`
`delay, prejudice to the opposing party, or futility.’”) (quoting Friedl v. City of New York, 210 F.3d
`
`79, 87 (2d Cir. 2000)). “While the party seeking to amend its pleading must explain any delay,
`
`the party opposing the amendment bears the burden of showing prejudice, bad faith, and futility
`
`of the amendment.” United States ex rel. Raffington v. Bon Secours Health Sys., Inc., 285
`
`F.Supp.3d 759, 766 (S.D.N.Y. 2018) (internal quotations and citation omitted). A motion for leave
`
`will be denied as futile “only if the proposed new claim cannot withstand a 12(b)(6) motion to
`
`dismiss for failure to state a claim, i.e., if it appears beyond doubt that the plaintiff can plead no
`
`set of facts that would entitle him to relief.” DGI-BNSF Corp. v. TRT LeaseCo, LLC, 2019 WL
`
`5781973, at *3 (S.D.N.Y. Nov. 6, 2019) (Caproni, J.) (citing Milanese v. Rust-Oleum Corp., 244
`
`F.3d 104, 110 (2d Cir. 2001)).
`
`Relatedly, Rule 15(d) empowers a court “on just terms, [to] permit a party to serve a
`
`supplemental pleading setting out any transaction, occurrence, or event that happened after the
`
`date of the pleading to be supplemented.” FED. R. CIV. P. 15(d). “Where the plaintiff seeks to add
`
`7
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`

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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 14 of 25
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`related claims against the same defendant[], the analysis used to determine whether
`
`supplementation is appropriate under Rule 15(d) is identical to the analysis used to determine
`
`whether amendment is appropriate pursuant to Rule 15(a).” Kleeberg v. Eber, 331 F.R.D. 302,
`
`315 (S.D.N.Y. 2019) (granting leave); see also Bemben v. Fuji Photo Film U.S.A., Inc., 2003 WL
`
`21146709, at *1 (S.D.N.Y. May 19, 2003) (granting motion under FED. R. CIV. P. 15(d) to
`
`supplement by applying liberal standards of FED. R. CIV. P. 15(a)). “Thus, courts will grant leave
`
`to supplement a pleading so long as the supplemental facts are connected to the original pleading
`
`and there is no good reason to deny the request.” Kleeberg, 331 F.R.D. at 315. As with leave to
`
`amend, “[l]eave to supplement thus ought to be freely given in the absence of ‘undue delay, bad
`
`faith, dilatory tactics, undue prejudice to the party to be served with the proposed pleading, or
`
`futility.’” Levin v. Bank of New York, 2020 WL 8812043, at *1 (S.D.N.Y. Dec. 10, 2020) (quoting
`
`Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir. 1995)). The analysis of “Rule 15(d) reflects a
`
`liberal policy favoring a merit-based resolution of the entire controversy between the parties.”
`
`Altowaiti v. Cissna, 2020 WL 2036703, at *3 (S.D.N.Y. Apr. 28, 2020) (internal quotations
`
`omitted) (granting motion for leave).
`
`As discussed above and is evidenced from the proposed FAC, Nike seeks to amend its
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`original Complaint to add causes of action against StockX for counterfeiting and false advertising,
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`claims that are supported by facts that were discovered after this action was filed by Nike on
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`February 3, 2022. (Duvdevani Decl. Ex. A. at ¶¶ 7, 12, 73 .) Some of those facts also relate
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`directly to Nike’s original causes of action for trademark infringement and StockX’s defenses to
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`those claims. For example, Nike’s proposed allegations that StockX has sold counterfeit Nike
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`products, including styles of shoes purportedly associated with infringing Nike-branded Vault
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`NFTs, relate directly to statements StockX made in its answer that its Vault NFTs are no more
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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 15 of 25
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`than “claim tickets” to a pair of Nike shoes that StockX guarantees are 100% authentic. (Dkt. No.
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`21 at 2.)
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`Nike also sets forth in its proposed FAC additional events that occurred after Nike filed
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`this action that supplement its original causes of action. For instance, Nike’s Complaint described
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`in detail the terms that govern StockX’s Vault NFT offerings, yet in the weeks after this action
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`was filed, StockX repeatedly modified those terms, apparently to better align with its defensive
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`strategy. (Duvdevani Decl. Ex. A. at ¶¶ 7, 73 .) StockX likewise scrambled to modify or remove
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`certain marketing statements and materials on its platform that, inter alia, promised owners of
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`Vault NFTs exclusive StockX benefits as part of the purchase of a Vault NFT. (Id. at ¶ 73.) Nike’s
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`proposed FAC includes allegations relating to this post-February 3, 2022 conduct. (See generally
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`Duvdevani Decl. Ex. A.) Nike also proposes facts relating to its recent entry into the NFT market
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`with the February 7, 2022 and April 22, 2022 launch of the highly anticipated and revolutionary
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`MNLTH and CryptoKicks™ NFTs, and the confusion that ensued. (Id. at ¶¶ 44-45, 104.) Nike’s
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`original Complaint had noted that Nike’s entry was imminent. (Dkt. No. 1 at 14.)
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`Because Nike is both supplementing its Complaint to account for conduct and facts
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`discovered or occurring after February 3, 2022 and amending its Complaint to allege other new
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`facts and assert additional, related causes of action, Nike’s Motion is made pursuant to both Rule
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`15(a) and (d), which, in any event, share the same lenient standard for granting leave to amend.
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`See Kleeberg, 331 F.R.D. at 315; Levin, 2020 WL 8812043, at *1.
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`B.
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`NIKE SHOULD BE GRANTED LEAVE TO AMEND
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`1.
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`Nike’s Did Not Excessively Delay In Filing Its Motion
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`Where a court’s scheduling order permits the filing of a motion to amend within thirty days
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`of that order and the moving party files its motion within that period, a motion for leave is not
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`untimely and a claimant did not engage in undue delay. See e.g., Artists Rts. Enf't Corp. v. Est. of
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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 16 of 25
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`King, 2017 WL 2062988, at *2 (S.D.N.Y. May 15, 2017) (finding amendment filed within thirty
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`day limit set by scheduling order was not “untimely”); Loftex USA LLC v. Trident Ltd., 2012 WL
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`5877427, at *4 (S.D.N.Y. Nov. 20, 2012) (finding where Plaintiff filed its motion for leave to
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`amend within the schedule proposed by the parties and adopted by the court that the proposed
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`amendment was not unduly delayed nor prejudicial). Here, the Court’s Civil Case Management
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`Plan and Scheduling Order permitted amendment within thirty days of April 11, 2022. (Dkt. No.
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`25.) This Motion is therefore timely and subject to Rule 15(a)(2)’s “liberal” and “permissive”
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`standard. Sacerdote, 9 F.4th at 115 (discussing Rule 15 and 16’s three standards for amending
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`pleadings that depend on when the amendment is sought).
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`In addition, Nike’s FAC is premised on multiple facts that occurred or were discovered
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`after this action was filed. (See, e.g., Duvdevani Decl. Ex. A at ¶¶ 7, 12, 73 .) Nike therefore did
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`not delay in making its Motion. See, e.g., Apotex Corp. v. Hospira Healthcare India Priv. Ltd.,
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`2019 WL 3066328, at *10 (S.D.N.Y. July 12, 2019) (finding “the amendment is timely in that it
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`adds allegations of conduct that post-date the FAC”).
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`2.
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`Nike’s Motion Is Made In Good Faith And For Legitimate Purpose
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`As noted above, Nike’s proposed FAC alleges new and recently discovered facts that
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`support both its original claims and its new causes of action for counterfeiting and false advertising.
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`(Duvdevani Decl. Ex. A at ¶¶ 7, 12, 164-175.) Nike’s trademarks and accompanying goodwill are
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`some of the cornerstones of its business, and Nike as a trademark owner is obligated to police
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`infringing uses of its marks. See Louis Vuitton Malletier, S.A. v. My Other Bag, Inc., 2018 WL
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`317850, at *3 (S.D.N.Y. Jan. 8, 2018), aff'd, 764 F. App'x 39 (2d Cir. 2019) (recognizing “the fact
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`that the law compels trademark owners to police their marks or risk losing their rights.”); El Greco
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`Leather Prod. Co. v. Shoe World, Inc., 806 F.2d 392, 395 (2d Cir. 1986) (recognizing that “[o]ne
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`of the most valuable and important protections afforded by the Lanham Act is the right to control
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`Case 1:22-cv-00983-VEC Document 32 Filed 05/10/22 Page 17 of 25
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`the quality of the goods manufactured and sold under the holder's trademark.”); see also 2
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`MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 11:91 (5th ed. 2022) (“[T]he corporate
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`owners of trademarks have a duty to protect and preserve the corporation's trademark assets though
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`vigilant policing and appropriate acts of enforcement.”). Nike is especially compelled to police
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`its rights when the infringement rises to the level of counterfeiting, which courts in this district
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`hold is “the ‘hard core’ or ‘first degree’ of trademark infringement.” Gucci Am., Inc. v. Guess?,
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`Inc., 868 F. Supp. 2d 207, 242 (S.D.N.Y. 2012). Here, Nike in its proposed FAC seeks relief from
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`StockX’s sale counte