YUGA LABS WINS LAWSUIT AGAINST RYDER RIPPS AND JEREMY CAHEN
A California court has ruled in favor of Yuga Labs, creator of the Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collection, in a lawsuit against conceptual artists Ryder Ripps and Jeremy Cahen for trademark infringement. Yuga Labs accused Ripps and Cahen of misusing BAYC trademarks to sell their own NFTs, which they called RR/BAYC. The court ruled that Yuga Labs was entitled to protect its trademark and that the RR/BAYC series didn’t qualify as artistic expression under the First Amendment.
ARTISTIC EXPRESSION VS. TRADEMARK INFRINGEMENT
In response to Yuga Labs’ allegations, Ripps and Cahen claimed that their project was a form of artistic expression. However, the court disagreed, stating that the RR/BAYC NFT collection was merely a collection of digital images that pointed to the same online images used by the official BAYC collection. The court noted that there was no critical commentary or artistic expression in the defendants’ sales or Ape Market website, and that the term ‘artistic expression’ did not apply to the RR/BAYC collection.
COPYRIGHT AND TRADEMARK LAWS VS. NFTS
Applying copyright and trademark laws to NFTs is somewhat uncharted territory, and Ripps and Cahen argued that Yuga Labs had transferred trademark rights to those who bought BAYC NFTs. However, the court cited Yuga Labs’ terms and conditions, which granted BAYC NFT holders a copyright license but not a trademark license to use the BAYC marks. The court also cited a recent copyright case involving the luxury fashion brand Hermès and unauthorized NFT creator MetaBirkins, which affirmed that trademark laws can apply even to intangible goods.
Ripps and Cahen also violated cybersquatting rules, which involve registering domain names similar to trademarked brands in the hope of profiting from them. The court noted that the rrbayc.com and apemarket.com domains created and used by the defendants were confusingly similar to Yuga Labs’ branding.
PAYMENT AND DAMAGES
The court concluded that Yuga Labs was entitled to damages but did not specify the amount, which will be determined in a later trial. It is unclear how much Ripps and Cahen will end up paying as a result of the lawsuit.
The ruling in favor of Yuga Labs affirms the importance of protecting trademarks in the fast-growing world of NFTs. It also clarifies that creators cannot simply claim artistic expression to avoid liability for trademark infringement. As the use of NFTs becomes more widespread, the legal landscape surrounding them will inevitably evolve. It remains to be seen how future cases will shape the relationship between NFTs and intellectual property rights.