Welcome to our monthly NFT lawsuit.
Non-Fungible Tokens (NFTs) are the subject of much debate and interest, and the questions, legal issues and disputes surrounding them continue to increase.
When faced with such a high growth phenomenon, the law can take time to catch up. Boodle Hatfield is closely following developments and will provide you with an overview of the most important NFT disputes you should be aware of each month.
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Lavinia Deborah Osbourne v (1) Unknown persons (2) Ozone Networks Inc acts as OpenSea
The background details of this case are covered by our summary in April and can be found here.
As a reminder, this case concerns two NFTs (works of art from the Boss Beauties series), which were removed from Osbourne’s digital wallet in January 2022. In court rulings given in March 2022, a proprietary freezing order was issued with regard to the NFTs until the end. of the trial, and a disclosure order was issued against OpenSea to help identify defendants.
UPDATE:
The verdict has now been handed down. Important takeaways include the following:
- NFTs as property: While the judge stated that there are likely to be problems with NFTs that constitute actual property under the law, it was confirmed that “there is at least one realistic argument that such symbols should be treated as property under English law“.
- Where are the cryptocurrencies “located”: The judge ruled that the applicant should be treated as having had the NFT in his possession in England. This follows previous case law that treats cryptocurrencies as located at the place where the person who owns them is domiciled.
- Injuries are not a sufficient remedy: The judge noted that Boss Beauties “are assets that have a special, personal and unique value to the applicant that extends beyond their pure Fiat currency value. The court will readily order the protection of assets in such circumstances.” It was also noted that since there was no information about “unknown persons”, there was no confidence that they would have the means to meet a claim for damages.
- Service outside the jurisdiction: Previous case law was cited as establishing the principle that property obtained through fraud (in a manner similar to that at hand) is impressed by a constructive trust when it falls into the hands of those responsible for removing the assets. The judge was therefore convinced that “Gateway 15” (which applies to claims related to trusts) was satisfied. “The applicant may file a claim form outside the jurisdiction with the permission of the court in accordance with Rule 6.36 where … a claim is made against the defendant as a constructive trustee, or trustee of a resulting trust where the claim arises as a result of acts or events occurring within this jurisdiction or is related to assets within the jurisdiction … As to this, as I have already explained earlier in this judgment, it is at least a realistic argument to say that the assets were removed from the applicant’s account in the manner I have described should be treated as located in England, because England is where the applicant is domiciled. “
Yuga Labs, Inc. v. Ryder Ripps, et al
- The creators of Bored Ape (Yuga Labs) have sued artist Ryder Ripps, who has branded “replica” Bored Ape NFTs “as a protest against and parody of the Bored Ape Yacht Club”. Ripps is said to have earned more than $ 5 million on the project, and Yuga claims to have devalued the Bored Ape brand.
- Ripps is being sued for false advertising, cyber-squatting, trademark infringement and unfair competition (among other allegations). Yuga claims that Ripps’ actions constitute “trademark infringement at the elementary level: [the defendants] sell the same or related products, in the same place, under the same brands. “
- Ripps responded on Twitter and stated that “the lawsuit grossly mischarges the RR / BAYC project – people who reserved an RR / BAYC NFT (Non Fungible Token) understood that their NFT was characterized as a protest against and parody of BAYC,” he wrote. , “and no one was under the impression that RR / BAYC NFTs were replacements for BAYC NFTs or would give them access to Yuga’s club. They explicitly acknowledged a disclaimer when they were purchased.”
Jay-Z / Roc-A-Fella Records v Damon Dash
The background details of this case are covered by our March and May summaries and can be found here.
UPDATE:
- The parties have now settled the case Reasonable doubt NFT lawsuit.
- In papers filed June 13, it was stated that Dash could sell its third of its stake in Roc-A-Fella Records, but could not “in any way dispose of any real estate interest in Reasonable Doubt“. The agreement claims that Roc-A-Fella Records”owns all the rights“to reasonable doubt, including copyright, and adds that”no shareholder or member of Roc-A-Fella Records has a direct stake in Reasonable Doubt“.
- The deal comes almost a year after Jay-Z / Roc-A-Fella Records sued Dash, one of the record company’s co-founders, for allegedly trying to imprint and sell the copyright to Reasonable Doubt as an NFT. Dash disputed the claim, insisting he was not trying to sell an NFT of Reasonable Doubt, but rather his stake in Roc-A-Fella Records.
- The lawyer for Dash commented that “unfounded lawsuit“has ended as it began”each party in the same position as they were before the start of this trial“.
MFT (Music Fungible Token) company seeks to defeat Lil Yachty their claim on the basis of jurisdiction
- Earlier this year, Lil Yachty, an American rapper, filed a lawsuit against ‘MFT’ salesman Opulous, for “malicioususe his likeness and name without his consent.
- The dispute arose when Opulous announced that they were launching a line of music NFTs and delivering “unmissable NFT drops … led by world-renowned artists including Lil Yachty“The NFT collection would give buyers access to new music from the rapper and prominent photos of him and press interviews of him about the project. Lil Yachty claims that he spoke to the company several times in 2021, but that”no agreement or contract terms“was reached.
- He claimed the ads were “likely to cause confusion, and have caused actual confusion, in the minds of the consuming public with regard to an association [between himself and the defendants]”He accused Opulous of trademark infringement, unfair competition and infringement of the law of public access.major and irreparable damage and damage to [his] business and goodwill“.
- In response, Opulous issued a statement stating that “Use of Lil Yachty’s name and likeness was all authorized by Lil Yachty and his representativesThe formal response has been filed by Ditto Music, the sister company of Opulous, and Lee Parsons, the founder. Both were also accused on the grounds that they had also posted about the NFT launch on their social media channels. The two defendants have requested that the court dismisses the appeal on the basis of jurisdiction.
- In response, however, the legal representatives of Lil Yachty commented that “the petition filed by the defendants in this case does not address the real issue “-” we look forward to addressing these allegations in court and have no further comments at this time“.
The NFT platform’s dispute with the art museum about NFTs based on “fake works”
- A Chinese NFT trading platform, Huanhe, is in a copyright dispute with The Peon Art Museum, a memorial art museum built in the former home of Xu Beihong, a Chinese painter also known as Ju Péon.
- Huanhe published a series of digital inkwell collections based on works of art by the Chinese painter. However, the museum claims that it has not authorized Huanhe to distribute the digital collections, and says “Some digital platforms sell related digital collections in the name of Mr. Xu Beihong. However, these digital collections are based on fake works or cannot prove originality. Some even have nothing to do with Mr. Xu at all. These mixed collections seriously harm the rights and interests of consumers, and violate Mr. Xu’s right to reputation and identity and various intellectual property rights acquired by his descendants under the law. “
