Bored Ape Yacht Club creator wins lawsuit over copycat NFT collection

A judge has ruled in favor of Bored Ape Yacht Club creator Yuga Labs in a lawsuit against conceptual artists Ryder Ripps and Jeremy Cahen, whom Yuga Labs accused of trademark infringement over a parody of BAYC’s collection of non-fungible tokens (NFTs). On Friday, a California court said Yuga was entitled to protect the BAYC trademark and that Ripp and Cahen’s project, known as RR/BAYC, is not artistic expression protected by the First Amendment. “Defendant’s sale of RR/BAYC NFTs is no more artistic than the sale of a counterfeit purse,” U.S. District Judge John Walter wrote in a summary judgment.

Yuga Labs filed suit shortly after Ripps and Cahen introduced the collection, alleging the pair misused the BAYC trademarks “in an attempt to trick community members into buying their NFTs instead of the official BAYC NFTs.” It also accused the pair of engaging in false advertising that saw “confusion” among users. Ripps did not immediately respond to an emailed request for comment The Verge.

Despite Ripps and Cahen’s claim that the RR/BAYC project is a matter of artistic expression, the court states that the series is not protected by the First Amendment. It is simply “a collection of NFTs that point to the same online digital images as the BAYC Collection,” the ruling states, while noting that “Defendant’s NFT Marketplace Sales and the Ape Market website do not contain any artistic expressions or critical comments”.

Applying copyright and trademark laws to NFTs is largely uncharted territory, and Ripps and Cahen argued that Yuga Labs transferred its trademark rights to people who bought BAYC NFTs. But the court was not convinced. It cited Yuga Labs’ terms and conditions, which state that Yuga “grants to each BAYC NFT holder a copyright license for both personal and commercial use,” but “not a trademark license to use the BAYC Marks.”

The court also retracts claims that Yuga Labs does not actually own trademark rights because NFTs are intangible. To support its ruling, the court cites a recent copyright case involving the luxury fashion brand Hermès and MetaBirkins, an unauthorized NFT line that uses images of fake Birkin bags. In that case, a New York court ruled that goods do not need to be tangible for trademark law to apply, and ordered MetaBirkins creator Mason Rothschild to pay $133,000 to Hermès.

In addition to infringing Yuga Labs’ trademark, the court says Ripps and Cahen also violated rules related to cybersquatting, or the act of registering domain names similar to trademarked marks with the hope of profiting from a perceived connection to them. As noted by the order, Ripps and Cahen created and used the domains rrbayc.com and apemarket.com, both of which contained BAYC branding, which the court finds is “confusingly similar” to Yuga Labs’ branding.

It is not clear how much Ripps and Cahen may end up paying in this case. The judgment concludes that they are entitled to compensation, but it says that the amount must be determined in a later court case.