Yuga Copyright Infringement Found in Bored Ape Yacht Club NFTs by Judge

Yuga Labs, the company responsible for the highly popular Bored Ape Yacht Club (BAYC) NFT collection, has received a significant legal win from a U.S. court in California. The court granted a partial summary judgment in Yuga Labs' case against Ryder Ripps and Jeremy Cahen.

Ryder Ripps and Jeremy Cahen, the creators of RR/BAYC NFT collection, utilized comparable poses to Bored Ape primates and promotional materials akin to BAYC. The pair developed RR/BAYC as a satirical and critical reaction to Yuga Labs, alleging that BAYC NFTs included racist connotations, 4chan memes, and concealed Nazi imagery. Though this narrative has gained traction in certain online communities, the founders of BAYC vehemently deny these accusations.

In June 2022, Yuga Labs filed a lawsuit accusing Ripps and his associates of intentionally creating confusion among consumers through the guise of satire, resulting in unjust profits worth millions of dollars, and boasting about the harm inflicted on BAYC through their claims.

The U.S. District Court for the Northern District of California ruled that Yuga Labs is the rightful owner of the BAYC trademarks, which are valid and enforceable. The court also found that the defendants used the BAYC marks - referring to the images - to market and sell RR/BAYC NFTs without Yuga Labs' permission, creating a high likelihood of confusion among consumers. The court noted that the similarity in product appearance could mislead customers seeking to purchase genuine BAYC NFTs or track their value using token tracking tools.

The court also determined that the defendants' use of the BAYC marks did not qualify as fair use or artistic expression under the Rogers Test. The court noted that Yuga Labs' BAYC marks had a strong presence in the market, and the RR/BAYC project was intentionally misleading. As a result, the use of the marks was not deemed to be protected by these defenses.

Furthermore, the court ruled that the defendants' use of domain names rrbayc.com and apemarket.com had the potential to cause confusion, and the judge concluded that the defendants were engaging in cybersquatting. The court found that the defendants' actions were motivated by a malicious intent to profit, rather than a legitimate interest in the domain names.

Yuga Labs had requested $200,000 in statutory damages for the cybersquatting, but the court dismissed this claim and stated that the amount of damages would be determined during an upcoming trial.

Ripps and Cahen attempted to argue that NFTs are intangible assets and therefore not protected under the Lanham Act, which deals with trademarks, service marks, and unfair competition. The Lanham Act provides protection against infringement and false advertising.

The judge disagreed with their argument, stating that NFTs, as virtual goods, are still considered goods under the Lanham Act, because of their unique, traceable, and brand-associated characteristics.

A different case involving Yuga Labs and the developer of the RR/BAYC websites and smart contracts, Thomas Lehman, was settled in February.

“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 at the time.

Source Coindesk