Yuga Labs wins case over Bored Ape NFT
It’s official: a US judge in California has ruled it Yuga Labs should be awarded legal victory in the case against Ryder Ripps and Jeremy Cahensuch as by using the trademarks of Boring Monkey NFT was intended to confuse consumers.
Full detail below.
The case involving Bored Ape NFTs
As expected above, a US court in California granted Yuga Labs, the company behind the prestigious Bored Ape Yacht Club (BAYC) The NFT Collection, a legal victory in the form of a partial summary judgment in its case against Ryder Ripps and Jeremy Cahen.
But what is the issue at hand? It turns out that Ripps and Cahen are the duo behind the RR/BAYC NFT collection, which featured the same monkeys and in similar poses as Bored Ape.
Not only that, the duo also used marketing materials similar to BAYC. Specifically, it appears that the two created RR/BAYC as a satirical and critical response to Yuga Labs. Indeed, according to their claims, the BAYC NFT collection contains “racist dog whistles”, “4chan memes” and “hidden Nazi imagery”.
Obviously, the founders of BAYC completely denied these claims, and as a result, in June 2022, Yuga sued Ripps and Cahen, claiming that the two knowingly confusing consumers under the guise of satire, generating millions in unfair profits and causing significant damage to the Bored Ape NFT collection.
The court’s decision in the Bored Ape NFT case
With respect to what was explained above, the US District Court for the Northern District of California ruled that Yuga Labs owns the BAYC trademarks, which are valid and enforceable.
As for the defendants, the court says they used the BAYC marks, referring to the images, to sell RR/BAYC NFTs without the consent of Yuga Labs and in a “manner likely to cause confusion.”
In fact, the NFTs in the RR/BAYC collection show the appearance of a product similar to Bored Apes NFT, which tends to confuse consumers who intend to buy a real BAYC NFT or track its value with token tracking tools.
In addition, the court ruled that the defendants’ use of the BAYC trademarks was not a case of fair use, much less an artistic expression called Roger’s testas Yuga’s BAYC brand has always been very strong in the market and the RR/BAYC project was meant to mislead.
The court also ruled that the domain names registered and used by the defendants, rrbayc.com and apemarket.com respectively, were also potentially confusing. Therefore, the court concluded that the defendants’ actions were driven by a “malicious intent to make money” and for which the two could be charged cybersquatting.
Accordingly, Yuga Labs claimed that it should receive the sum of $200,000 in statutory compensation for cybersquatting. However, the court rejected this claim and stated that the assessment of compensation would be made during a pending trial.
Ripps and Cahen’s defense and cybersquatting
For their part, Ripps and Cahen attempted to argue that because NFTs are intangible, they are not protected by Lanham Actthe law governing trademarks, service marks and unfair competition, which provides protection against infringement and false advertising.
However, the court rejected this defense, stating that NFTs, like virtual goods, still qualify as goods under the Lanham Act due to their unique, traceable, and branded characteristics.
In addition, we see that Yuga, in a separate case, reached a settlement in February with the RR/BAYC website and smart contract developer Thomas Lehmanwho had stated the following:
“It was never my intention to harm the Yuga Labs brand and I reject any derogatory statements about Yuga Labs and its founders and appreciate their many positive contributions to the NFT space.”
In any case, what is cybersquatting, the illegal practice that Ripps and Cahen are accused of in the Bored Apes NFT case? According to the definition, cybersquattingalso known as domain squatting, refers to the practice of registering a domain name that resembles a well-known organization or person without their permission.
Therefore, in the most general cases, the domain registrant purchases the latter in bad faith, with the aim of profiting from the goodwill of the person or organization or causing damage to their reputation.
To remedy this unfortunately growing illegal practice it is Consumer Protection Against Cybersquatting Act (ACPA) in the United States. For international disputes, however, it is Uniform Domain-Name Dispute-Resolution Policy (UDRP). In particular, we see that between January and October 2020, the World Intellectual Property Organization (WIPO) handled thousands of cybersquatting cases.
