The ongoing trademark enforcement dispute between Yuga Labs and Ryder Ripps took a major turn last week with the United States District Court for the Northern District of California siding with the Bored Ape Yacht Club (BAYC) creators. The ruling provides some much-needed clarity about the legality of trademark infringement allegations and tangible NFTs in the U.S.
The Controversy
At the center of the controversy is Ryder Ripps and Jeremy Cahen’s RR/BAYC collection, which features primates in similar poses to Bored Ape Yacht Club and employed similar marketing tactics. The two stated their project was meant to be a satirical take on the BAYC collection. Still, Yuga Labs argued that it was actually causing significant consumer confusion and resulting in profits. The court agreed and issued an order granting Yuga Labs partial summary judgment.
The Judge Rules
The court held that the defendants employed Yuga Lab‘s BAYC marks to sell RR/BAYC NFTs without permission, creating customer confusion with similar product looks, and thus, infringing on Yuga Lab’s trademarks. The court further found that the RR/BAYC project was conducted with malicious intent and was not a case of fair use or artistic expression.
The court also determined that consumers could be confused by the domain names registered, rrbayc.com and apemarket.com, and determined that the domain use amounted to cybersquatting. Another victory for Yuga Labs was the judge’s opinion that Intangible NFTs are still goods that can be protected under the Lanham Act.
Damages and Regrets
Yuga Labs had sought $200,000 in statutory damages for the cybersquatting, but the court denied the request and stated that the determination of damages would be left for the pending trial.
Separately, Yuga Labs and Thomas Lehman, the developer of the RR/BAYC websites and smart contracts, reached a settlement in February. In his statement at the time, Lehman expressed regret and rejected all disparaging statements against Yuga Labs and its founders.
This ruling clarifies and sanctifies the concept of intangible NFTs as ‘goods’ in the eyes of the United States court system. This is a monumental decision for NFT and intellectual property law, as it is the first high-profile federal court case to make this distinction. It also sets a precedent that can be used by other creators to ensure their trademarks, logos, and other works are protected.
The Consequences on the NFT Space
The outcome of this case could potentially have lasting consequences on the NFT space. As it stands, the broader NFT market has seen a decline in sales, volume, and unique users, and the Bored Apes Yacht Club is no exception. The court’s decision may provide an incentive for a revival of the project, and potential collaborations between Yuga Labs and other creators to prevent similar cases from arising.
Regardless, the BAYC vs RR/BAYC case will continue to be watched closely in the days ahead, as the court-ordered damages are a major outstanding issue. For now, the US Court’s decision confirms Yuga Labs’ enforcement of its trademark rights for intangible NFTs.
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