Yuga Labs, the blockchain company behind some of the NFT boom’s most popular collectibles, has won a lawsuit protecting the trademark of its Bored Ape Yacht Club NFT series.
On April 21, a federal court in California ruled in favor of Yuga Labs in his lawsuit against the artistic duo Ryder Ripps and Jeremy Cahen. In mid-2022, Ripps and Cahen released the RR/BAYC NFT Collection which consisted of thousands of quirky monkeys that looked eerily similar to those created in Yuga Labs’ hugely successful project. RR/BAYC Monkeys were cheaper than those sold by Yuga Labs, but used similar marketing materials.
Ripps and Cahen claimed to satirize Yuga Labs, but the company, in its lawsuit filed in June 2022, said the pair created consumer confusion and was deliberately intended to harm the business.
The U.S. District Court for the Northern District of California ruled that RR/BAYC’s collection did not constitute artistic expression protected by the First Amendment, as Ripps and Cahen had asserted, and that Yuga Labs was entitled to protect a product brand. He agreed with Yuga Lab’s idea that RR/BAYC had deliberately attempted to mislead consumers, noting that the domains, rrbayc.com and apemarket.com, both contained the BAYC trademark, which he found “similarly confusing” with Yuga Labs’ trademark.
“The Court finds that the Defendants acted with a bad faith intent to profit,” reads the ruling by U.S. District Judge John Walter. “RR/BAYC NFTs do not express an idea or point of view, but simply point to the same online digital images associated with the BAYC collection.”
Another blow to RR/BAYC was the rejection of its argument that Yuga Labs transferred trademark rights to those who purchased BAYC NFTs. The court pointed out that Yuga Labs’ terms and conditions, while permitting licensees for personal and commercial use, do not grant “a trademark license to use the BAYC Marks.”
As of this writing, RR/BAYC has not responded to a request for comment.
This stop follows the landing of the luxury brand Hermès a legal victory over digital artist Mason Rothschild, creator of the NFT MetaBirkins project. Both suits have been closely watched in the crypto art space as potential indicators that establish the trademark rights of NFT companies and artists.
“We are thrilled with this win,” Yuga Labs told Artnet News. “It’s not just a win for us. It’s a win for the entire Web3 industry to hold scammers and counterfeiters accountable.
The decision states that Yuga Labs is entitled to damages, although it rejected the company’s push for “aggravated damages” of $200,000. The amount of compensation will be decided at a later trial.
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