California Court Awards Yuga Labs Over $1.5 Million in NFT Trademark Case Against Artist Ryder Ripps

News | October 30, 2023 By:

A federal court in California has ruled in favor of Yuga Labs, the creator of the Bored Ape Yacht Club non-fungible token (NFT) collection, in its trademark infringement lawsuit against artist Ryder Ripps. On October 25, 2023, Judge John F. Walter of the U.S. District Court for the Central District of California issued a 28-page findings of fact and conclusions of law awarding monetary damages and a permanent injunction to Yuga Labs.

The case dates back to May 2022 when Ripps, along with his business partner Jeremy Cahen, launched their own NFT collection called the “Ryder Ripps Bored Ape Yacht Club” or “RR/BAYC.” The RR/BAYC NFTs pointed to the same underlying digital images used in Yuga Labs’ popular Bored Ape Yacht Club collection but were minted on a different Ethereum blockchain contract. In addition, Ripps and Cahen promoted and sold the RR/BAYC NFTs using Yuga Labs’ unregistered “BORED APE YACHT CLUB,” “BAYC,” and other marks without permission.

Yuga Labs sued Ripps and Cahen for trademark infringement in July 2022, alleging that their use of the BAYC marks for a competing NFT collection amounted to false designation of origin, false advertising, cybersquatting, and various state law claims. Ripps and Cahen defended themselves by arguing their RR/BAYC project was a form of conceptual art and political protest meant to criticize Yuga Labs for embedding “racist, neo-Nazi, and alt-right dog whistles” in the BAYC collection.

Following pre-trial motions and a July 2023 court trial, Judge Walter ruled that Yuga Labs owns valid trademark rights in the BAYC marks despite their unregistered status. The court also found Ripps and Cahen intentionally infringed those marks and registered the domains rrbayc.com and apemarket.com in bad faith. As such, Judge Walter granted summary judgment in Yuga Labs’ favor on its trademark infringement and cybersquatting claims.

In the October findings, Judge Walter awarded Yuga Labs $1,375,362.92 in disgorged profits from Ripps and Cahen’s sales of the RR/BAYC NFTs. The court also imposed $200,000 in statutory damages for cybersquatting regarding the two infringing domain names. Further, the findings include a permanent injunction barring Ripps and Cahen from further use of the BAYC marks and requiring the transfer of the disputed domains, social media accounts, and Ethereum blockchain contract to Yuga Labs.

Significantly, Judge Walter ruled the case was “exceptional,” entitling Yuga Labs to an award of reasonable attorneys’ fees. The market value of some Bored Ape Yacht Club NFTs exceeds $1 million each, so the awarded damages, while sizable, represent only a fraction of the overall worth at stake in the high-profile intellectual property dispute.

Looking ahead, Ripps and Cahen may appeal the rulings to the U.S. Court of Appeals for the Ninth Circuit. However, for now Yuga Labs has secured over $1.5 million in monetary remedies along with control over the instrumentalities Ripps and Cahen used to infringe the BAYC trademarks. The decision serves as a warning that even conceptual artwork using trademarks without permission can amount to infringement. It also reaffirms that NFT collections, like any other good or service, are subject to existing trademark and unfair competition laws.

A copy of the original filing can be found here.