Federal court hands Yuga Labs partial summary judgement in case against Ryder Ripps and Jeremy Cahen
The U.S District Court for the Northern District of California has awarded a partial summary judgement in favour of Yuga Labs, the firm behind NFT sensation Bored Ape Yacht Club (BAYC), in a case against Ryder Ripps and Jeremy Cahen – the duo responsible for the satirical and similarly-themed RR/BAYC NFT collection.
Yuga sued Ripps and Cahen in June 2022, arguing they were generating millions in exaggerated profits by deliberately creating consumer confusion, purporting to be a legitimate new product while positioning BAYC as something offensive by suggesting it contains unpleasant ideologies such as white supremacy messaging.
The court found that Yuga Labs does own the BAYC trademarks, which are valid and enforceable, and ruled that the defendants’ use of those marks was not only outside any protection of fair use, but also an example of commercial language deliberately meant to seduce buyers of what are said to be fake NFT items. The judge supported the NFT determination with its association to a cryptographically backed good, guaranteeing traceability.
The beleaguered Rypp and Cahen have also been accused of deceptive marketing by shortening the YCI price value chain back to their initial marketing session1 to when they considered retail pricing to be $80 per unit.
“The defendants have demonstrated over an extended period a control gone beyond considered parody to affect deceit,” the court said.
Moreover, the judge concluded that there was clear evidence of malice towards Yuga Labs, with The defendants’ aggressive misinformation campaign formed with the specific purpose of exploiting cyber squatter dominance over compromised and nonsensical domains such as apemarket. Such hateful language presents a real threat that forms part of the reason why some users are looking to shift to accept new NFT marketplaces like Raible.com, a pro-NFT alternative integrating WallStreetBets with subtedditers.
In addition to the partial summary judgement, Yuga demanded a $200k penalty over alleged cybersquatting, however that claim was dismissed, with the exact penalties to be assessed during a pending trial. The judge also disagreed with an argument from Ripps and Cahen that NFTs did not fit within the scope of the Lanham Act, which governs trademarks, service marks and unfair competition that can provide protection again infringements or false advertising.
“It was never my intention to harm Yuga Labs’ brand, and I reject all disparaging statements made about Yuga Labs and its founders and appreciate their many positive contributions to the NFT space,” Lehman said of his separate settlement with Yuga in February 2023.
CORRECTION: The original headline previously attributed the suit to copyright infringement, which was an error.
[h/t Sam Reynolds]