Yuga Labs Wins a Lawsuit Against a Copycat NFT Collection
Bored Ape Yacht Club (BAYC) creator Yuga Labs has won a lawsuit against conceptual artists Ryder Ripps and Jeremy Cahen over a trademark infringement suit after the artists created a parody of the BAYC non-fungible token (NFT) collection.
A California judge ruled that Yuga Labs had the right to protect its BAYC trademark and that the artists’ NFT project dubbed RR/BAYC was not an artistic expression that is protected by the First Amendment with the US District Judge John Walter comparing the sale of the RR/BAYC NFTs as akin to selling “counterfeit handbag.”
Ripps and Cahen launched the RR/BAYC NFTs last May. The NFT collection features duplicates of the artwork in the real BAYC collection and they were being sold for much less than super-expensive BAYC NFTs.
At launch last year, Ripps tweeted that their RR/BAYC collection was an “artistic statement on the nature of NFT” as well as a “satire against Yuga Labs’ practice.”
It will be a ground breaking case in defining the nature of NFT, I seek to establish how you cant copy an NFT, every mint is a context shift, in my particular case this is an artistic statement on the nature of NFT, satire against Yuga Labs' practice & protest against the content
— RYDER RIPPS 🔜 (@ryder_ripps) May 17, 2022
The RR/BAYC collection also publicized claims that the BAYC collection features neo-Nazi imagery, a claim that has been denied by Yuga Labs.
Yuga Labs filed a lawsuit soon after Ripps and Cahen launched their “parody” NFT collection where the dominant NFT player alleged that the artists had misused its BAYC trademarks “in an attempt to trick community members into buying their NFTs instead of the official BAYC NFTs.”
Yuga Labs also accused the duo of partaking in false advertising that created “confusion” among users.
Ripps and Cahen argued that their RR/BAYC NFT collection was merely artistic expression rather than trademark infringement. However, the district court disagreed stating that the series was not protected by the First Amendment. The ruling states that theirs was merely “a collection of NFTs” pointing to “the same online images as the BAYC collection.” The ruling also states that the defendants NFT marketplace sales along with the Ape market contained “no artistic expression or critical commentary.”
The application of copyright and trademark laws to NFTs is still a relatively new legal terrain. Ripps and Cahen argued that Yuga Labs no longer owned the trademark rights to the NFTs as it transferred these rights to people who bought the BAYC NFTs. The court, however, disagreed, citing Yuga Labs terms and conditions that state that Yuga Labs “grants each BAYC NFT holder a copyright license for both personal use and commercial use” but “not a trademark license to use the BAYC marks.”
The court also rejected claims that Yuga Labs does not actually own the trademark rights to the BAYC NFTs as the NFTs are intangible. It cited a recent copyright case involving Hermes and MetaBirkins to back its ruling. The MetaBirkins NFTs collection featured images of fake Birkin bags. In that lawsuit, a court in New York ruled early this year that goods don’t necessarily have to be tangible for trademark laws to apply. MetaBirkins creator Mason Rothschild was ordered to pay Hermes $133,000.
The court said Ripps and Cahen not only infringed on Yuga Labs marks but they also broke cybersquatting rules. Cybersquatting entails registering domain names that are similar to trademarked names with the hope of making a profit from them due to the perceived connection. Ripps and Cahen registered the domain names apemarket.com and rrbayc.com which contain BAYC branding and according to the court, the domain names were “confusingly similar” to Yuga Labs branding.
The ruling stated that Yuga Labs was entitled to damages. The amount the artists will be liable to pay the BAYC NFTs creator will be determined at a later date.