Dolce & Gabbana USA Skates Past NFT Lawsuit

Dolce & Gabbana’s American division has avoided a legal storm over claims that its parent company dropped the ball on an NFT project. A New York federal judge, Naomi Reice Buchwald, ruled in favor of Dolce & Gabbana USA Inc., throwing out the lawsuit on the grounds that it wasn’t merely an extension of its Italian parent, Dolce & Gabbana SRL.

The Allegations

Back in May 2024, a bunch of NFT enthusiasts accused Dolce & Gabbana, together with its US counterpart, of being practically indistinguishable and failing to follow through with the “DGFamily” NFT initiative launched in 2022. They claimed the corporate pocketed a hefty $25 million while leaving promised advantages undelivered. But with the US branch as the only real domestic defendant, the long run of the lawsuit seems uncertain. Also named within the suit were UNXD Inc., a Dubai-based NFT marketplace, and Bluebear Italia SRL, creators of the “inBetweeners” NFT collection, neither of whom received the criticism.

What Was Promised?

The criticism stated that Dolce & Gabbana and UNXD worked together on the DGFamily project, which was presupposed to offer high-value perks like digital outfits for Decentraland, exclusive apparel, and live events for NFT holders. The suit argued that these guarantees never fully materialized, despite the numerous financial gain from NFT sales.

The Defense from Dolce & Gabbana USA

In a move to dismiss the lawsuit filed in January, Dolce & Gabbana USA insisted it was a standalone entity, not involved in any NFT dealings. They argued that the NFT project was an initiative from the Italian parent company, with no direct involvement from the US branch. The evidence presented, they claimed, failed to determine any substantial link between the 2 corporations regarding the NFT enterprise.

Judge’s Take on the Case

Judge Buchwald found the lawsuit lacking, because it failed to differentiate between the actions of the US and Italian corporations, lumping them together under the “Dolce & Gabbana” name. Even though the lawsuit mentioned overlapping executives and shared resources, it fell in need of providing specific examples of their involvement within the NFT project. The judge concluded that the plaintiff didn’t successfully exhibit that the Italian company dominated its US counterpart.

Final Thoughts

This legal saga highlights the complexities involved in distinguishing responsibilities inside multinational corporations, especially in relation to emerging technologies like NFTs. As the case unfolds, it stays a cautionary tale for businesses navigating the ever-evolving digital landscape.

NFT Insights: Jack Butcher is not a fan of NFT royalties, saying they’re simply “getting paid on churn.”