A judge has ruled in favor of Bored Ape yacht club creator Yoga Labs in a lawsuit against concept artists Ryder Ripps and Jeremy Kahn, who were accused by Yuga Labs of trademark infringement over a parody of BAYC’s non-fungible token (NFT) suite. A California court said on Friday that Yoga is entitled to BAYC trademark protection and that Ripps and Cahen’s project, known as RR/BAYC, is not a protected expression of art under the First Amendment. “The Defendants’ sale of RR/BAYC NFTs is no more artistic than the sale of a counterfeit handbag,” US District Judge John Walter wrote in summary judgment.
Yuga Labs filed a lawsuit shortly after Ripps and Cahen introduced the group, alleging that the pair misused BAYC trademarks “in an effort to trick community members into buying their own NFTs instead of the official BAYC NFTs.” It also accused the duo of being involved in false advertisements that sowed “confusion” among users. Ripps did not immediately respond to an emailed request for comment the edge.
RR/BAYC is “a set of NFTs that point to the same digital images online as the BAYC set”
Although Ripps and Cahen claim that the RR/BAYC project is a matter of artistic expression, the court holds that the series is not protected by the First Amendment. It is simply “a collection of NFTs that point to the same online digital images as the BAYC collection,” the judgment states, noting that “Defendants’ NFT Marketplace sales and Ape’s Marketplace website contain no artistic expression or critical commentary.”
The application of copyright and trademark laws to NFTs is largely uncharted territory, and Ripps and Cahen have argued that Yuga Labs transferred its trademark rights to people who purchased BAYC NFTs. But the court was not convinced. It cited Yuga Labs’ terms and conditions, which state that Yuga “grants each BAYC NFT holder a copyright license for both personal and commercial use” but “not a trademark license to use the BAYC Marks.”
The court is also responding to claims that Yuga Labs does not in fact own the rights to the trademarks because NFTs are intangible. To support its ruling, the court cites a recent copyright case involving luxury fashion brand Hermès and MetaBirkins, an unauthorized NFT line that uses images of fake Birkin bags. In this case, a New York court ruled that the merchandise did not have to be tangible for trademark laws to take effect and ordered MetaBirkins creator Mason Rothschild to pay Hermès $133,000.
In addition to infringing Yuga Labs’ trademark, the court says Ripps and Cahen also violated rules regarding cybersquatting, or the act of registering domain names similar to trademarked trademarks in hopes of profiting from a perceived connection to them. As noted in the ruling, Ripps and Cahen created and used the domains rrbayc.com and apemarket.com, both of which contain the BAYC trademark, which the court finds “confusingly similar” to the Yuga Labs trademark.
It is not clear how much Ripps and Cahen could have paid in this case. The ruling finds that Yuga Labs is entitled to damages, but states that the amount must be determined at a later trial.