Yuga Labs, the company behind the popular Bored Ape Yacht Club (BAYC) NFTs, just got some bad news. An appeals court overturned a big chunk of their $9 million win against artist Ryder Ripps and his business partner, Jeremy Cahen.
The Original Lawsuit
Ripps and Cahen created their own NFT collection, the Ryder Ripps Bored Ape Yacht Club (RR/BAYC), which looked very similar to Yuga Labs’ BAYC collection. They argued their collection was satire, criticizing what they claimed were racist and neo-Nazi elements in the original BAYC art. Yuga Labs sued, claiming trademark infringement and that Ripps and Cahen were misleading buyers. A lower court initially sided with Yuga Labs, awarding them $1.6 million, later increased to $9 million after Ripps and Cahen lost their countersuit.
The Appeals Court Decision
The appeals court agreed that NFTs can be trademarked, and that Yuga Labs had the right to the BAYC trademark. However, they reversed the lower court’s decision on trademark infringement and cybersquatting. The court said Yuga Labs didn’t prove that consumers were likely to be confused by Ripps and Cahen’s collection. While the court didn’t consider the RR/BAYC collection to be protected “fair use” or free speech, they sent the case back to the lower court for further proceedings.
What Happens Now?
The case is going back to the original court. Yuga Labs co-founder Greg Solano remains optimistic, pointing out that the appeals court upheld the trademark protection for BAYC NFTs and that the lower court already awarded them a significant amount of money. The legal battle is far from over.
