Yuga Labs, the blockchain mastermind behind the viral Bored Ape Yacht Club (BAYC) NFTs, has been awarded almost $1.6 million in damages by a California federal judge. This monumental ruling stems from a lawsuit against conceptual artist Ryder Ripps and his business associate Jeremy Cahen, accused of replicating Bored Ape NFT art.
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Judgment Day: Yuga Labs’ victory
On October 26, U.S. District Judge John Walter passed judgment in favor of Yuga Labs, acknowledging their right to damages exceeding $1.5 million from Ripps and Cahen. The duo’s contention was that the imitation of Yuga’s art was a project to critique its racial undertones.
This ruling corroborates a prior judgment from the U.S. District Court for the Central District of California. This initial judgment had proclaimed that Ryder Ripps and Jeremy Cahen had undeniably infringed on Yuga Labs’ copyrights with their April NFT collection.
Following the confirmation of this infringement, Yuga Labs secured an injunction and the subsequent trial to decide the magnitude of compensations owed to them.
Key takeaways from the trial
Judge Walter, in a decisive move, ruled that all profits generated by Ripps and Cahen from their NFT copies be directed to Yuga Labs. Dismissing their satirical defense, he emphasized their clear intention to capitalize on the success of BAYC. Quoting Judge Walter:
“Defendants were not creating a parody or satire. Instead, they were intentionally using the BAYC marks in an effort to profit off of Yuga’s success.”
Moreover, besides the primary damages, an additional $200,000 was awarded to Yuga for cybersquatting. The judge also mandated Ripps and Cahen to halt the sale of the replicated NFTs and transfer any related digital assets and social media handles to Yuga Labs.
While Yuga Labs accused the defendants of profiting immensely by replicating its Bored Ape tokens, the latter maintained their defense, terming their actions as artistic critique. This controversy is currently under the 9th U.S. Circuit Court of Appeals’ review, emphasizing a California law safeguarding free speech.
Expressing dissatisfaction, Ripps and Cahen’s attorney, Louis Tompros, conveyed plans to appeal the ruling. On the other hand, Yuga Labs celebrated the decision, viewing it as a triumph against scamming and the reinforcement of creators in the web3 space.
Further complications and legal struggles
Initiated in June 2022, this case began when Yuga Labs charged Ripps and Cahen of amassing vast sums via trademark infringement, deceptive advertising, and cybersquatting, amongst other allegations.
Earlier in October, Ripps and Cahen’s legal representation encountered difficulties convincing a panel from the United States Court of Appeals for the Ninth District to overrule the lawsuit initiated by the Bored Ape Yacht Club.
These judges, discernibly doubtful, concentrated on the secondary sale of the duplicated NFTs, sidelining the criticisms raised by Ripps and Cahen. The attorney sought dismissal based on free speech, alleging that the copied Bored Ape NFTs were a protest against covert anti-Semitic symbolism in the primary collection. However, Circuit Judge Morgan Christen expressed reservations, seeking a more lucid guideline to discern the lawsuit’s validity.
This legal tussle sheds light on the complexities of copyright law in the nascent but explosive NFT space, emphasizing the importance of protecting creators’ rights in this digital age.