Yuga Labs, the outfit behind the Bored Ape Yacht Club (BAYC) NFT collection, has emerged victorious in its long-running legal dispute against Ryder Ripps and Jeremy Cahen, the people responsible for the copycat RR/BAYC collection.
In their defense, Ripps and Cahen claimed that their project, which showcases apes closely resembling the BAYC, was developed as a satirical critique of Yuga Labs. The duo have gone on record to accuse the BAYC collection of incorporating racist undertones, 4chan memes, and concealed Nazi iconography—allegations that Yuga Labs strongly refutes.
In response, Yuga Labs filed a lawsuit in June 2022, asserting that Ripps and his collaborators intentionally created confusion under the pretext of satire. They argue that this has led to millions in undeserved profits for the RR/BAYC creators while concurrently tarnishing the BAYC brand with their claims.
California’s U.S. District Court has determined that the BAYC trademarks owned by Yuga Labs are legitimate and enforceable. The defendants were found to have employed the BAYC marks without obtaining permission from Yuga Labs, resulting in potential confusion. The court also decided that the defendant’s utilization of BAYC imagery did not fall within the categories of fair use or artistic expression according to the Rogers Test, given the strength of Yuga’s BAYC position in the market and the intent of the RR/BAYC project to deceive.
The defendants attempted to claim that intangible NFTs were not covered by the Lanham Act, which regulates trademarks, service marks, and unfair competition. However, the judge refuted this argument, asserting that NFTs still constitute as goods due to their distinct, trackable, and brand-linked properties.
Response From the Ripps and Cahen to Yuga Labs
Yuga Labs’ victory has broader implications for the Web3 industry, establishing a precedent for holding counterfeiters accountable for their actions. The amount owed in damages by Ripps will be determined in a later trial, with estimates suggesting that the NFTs sold for around $1.6 to $2 million.
In an email, Louis Tompros, the attorney representing Ripps and Cahen, shared his clients’ stance. He said, “Mr. Ripps and Mr. Cahen maintain that the RR/BAYC artistic project falls under First Amendment protection and that Yuga lacks valid and enforceable trademarks for NFTs. We plan to file an appeal.”
Despite the legal victory, the popularity of BAYC NFTs appears to be waning, with CoinGecko data indicating a steady decline in bored ape prices since April 2022. Dune Analytics data reveals a significant decrease in NFT trading volumes on popular platforms in recent weeks.
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