Bored Ape Yacht Club NFT Creator files trademark lawsuit (1)

Bored Ape Yacht Club, non-fungable token creator Yuga Labs Inc.’s trademark infringement lawsuit against two artists who allegedly sold unauthorized NFTs depicting digital images of monkeys survived a motion to dismiss and claims that it was brought forward to suppress the artists’ speech.

US District Judge John F. Walter denied Ryder Ripps and Jeremy Cahen’s motion to dismiss the suit on Dec. 16, ruling that a trademark-free speech balancing framework known as the Rogers test does not apply to the allegedly copied NFTs.

Walter also denied Ripps and Cahen’s anti-strategic public participation lawsuit, which claimed the lawsuit sought to suppress protected speech and criticism of racist dog whistles allegedly embedded in Bored Ape NFTs.

The Bored Ape NFT collection, released in 2021, features cartoon profile pictures of monkeys and achieved massive popularity after being endorsed by celebrities such as Justin Bieber and Paris Hilton. The NFTs have generated more than $2 billion in total sales.

Yuga Labs filed the lawsuit in the US District Court for the Central District of California in June, alleging that Ripps defrauded consumers into buying counterfeit Bored Ape NFTs by using Yuga Labs’ registered trademarks. Ripps, a visual artist and designer, said his NFTs, called “RR/BAYC,” criticize neo-Nazi and alt-right imagery found in the real Bored Ape collection.

Louis Tompros of Wilmer Cutler Pickering Hale & Dorr LLP, who represents Ripps and Cahen, said the artists will continue to fight the case as it moves to discovery and trial.

“This was First Amendment protected expression and artistic criticism that Ryder engaged in, and we look forward to proving that,” Tompros told Bloomberg Law.

Ripps sought dismissal based on the Rogers test, a legal doctrine that allows unauthorized use of a trademark as long as it is artistically relevant and does not explicitly mislead consumers.

But the judge was not convinced, finding that the RR/BAYC NFTs “do not express an idea or point of view” but instead point to the same images associated with the original Bored Ape collection. That means the Rogers test should not apply, Walter said.

Although the court applied the test, Walter found that Ripps’ use of the Bored Ape trademarks, including the skull logo, was not artistically relevant. “While there is a low bar for artistic relevance, as Plaintiff points out, it is not infinitely low,” the judge wrote.

The RR/BAYC NFTs are also explicitly misleading because they use the same trademarks on the same NFT marketplaces, Walter noted.

In a pending case involving Jack Daniels and dog toys, the US Supreme Court will consider whether the Rogers test should apply to ordinary consumer products.

Ripps’ anti-SLAPP motion failed because Yuga Labs’ lawsuit was based on commercial use of a trademark, not on Ripps’ criticism of Bored Ape NFTs, Walter said.

A spokesperson for Yuga Labs said in a statement to Bloomberg Law that the ruling rightly moves the case forward. Ripps and Cahan “intentionally misled consumers and made millions by using Yuga’s intellectual property to market and sell copycat NFTs. We will continue to prove these facts as the case progresses, the spokesman said.

Fenwick & West LLP represents Yuga Labs.

The case is Yuga Labs Inc. v. Ripps, CD Cal., No. 2:22-cv-04355, motion to dismiss denied 12/16/22.