The legal battle between NFT company Yuga Labs and artist Ryder Ripps will continue in a federal court in California. The appeals court overturned the previously awarded $9 million in damages, stating that the plaintiff failed to prove actual consumer confusion. However, the court confirmed that NFT collections can be treated as trademarks, setting a significant legal precedent.
Claims Against the Parody Collection
The lawsuit against Ripps and his partner Jeremy Cahen was filed in 2022. Yuga Labs accused them of trademark infringement over the launch of the “Ryder Ripps Bored Ape Yacht Club” collection, which the company claimed copied the original NFTs under the same name. Ripps argued that his work was satire and a critique of alleged racist themes in the original collection.
In 2023, a federal court ruled in favor of Yuga and awarded $1.6 million in damages, which later increased to $9 million. The appeals court, however, disagreed with the damage assessment, citing insufficient evidence of consumer confusion.
NFTs Recognized as Trademarks
Despite the reversal on damages, Yuga Labs secured a key legal win. A three-judge panel ruled that NFTs can be classified as “goods” under U.S. trademark law. This opens the door for NFT project owners to file lawsuits when similar collections emerge that may infringe on their rights.
The court also confirmed that Yuga was the first to use the Bored Ape Yacht Club mark in commerce, giving it priority rights to the brand.
Case to Proceed in District Court
The appeals court ruled that the case must return to federal district court to determine whether the defendants' actions truly violated Yuga’s trademark. At the same time, the court rejected the defense’s argument that the use of Yuga’s logos was protected speech under the First Amendment.
Yuga Labs co-founder Greg Solano commented on the ruling on X, stating that “the fight will finish in the district court.”
Ryder Ripps called the decision “a major victory for artists” defending their right to self-expression. Yuga Labs has not yet issued an official statement.
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