Bored Ape Yacht Club (BAYC) creators Yuga Labs have won a significant victory in its lawsuit against NFT artist Ryder Ripps and the RR/BAYC project. The lawsuit alleges that Ripps and his collaborators stole Yuga’s intellectual property without permission and used it to create their own NFT project, RR/BAYC. The case is ongoing for several months, with Yuga Labs seeking damages for trademark infringement and other causes of action.
Yuga Labs NFT vs RR/BAYC: Key Takeaways
In the recent ruling, Judge Walter grants Yuga’s motion for summary judgment on multiple causes of action. While damages will be determined at trial, the ruling is a significant win for Yuga Labs. The 22-page ruling dictates the actions by BAYC and how RR/BAYC infringes Yuga’s copyrights. The following are some key takeaways from the judge’s ruling:
– 1) False designation of origin:
Judge Walter found that Yuga Labs owns the BAYC marks, even though they did not register them. Moreover, they suggest that the marks are valid and protectable. Yuga Labs use the marks in commerce, and they have not transferred or abandoned trademark rights. The judge concluded that the majority of the Sleekcraft factors weigh in favor of Yuga Labs and that Yuga Labs is entitled to monetary damages and injunctive relief. However, the judge denied the portion of Yuga’s motion that seeks a determination of whether this is an exceptional case. In which case, it entitles them to enhanced damages or attorney’s fees.
– 2) Cybersquatting:
The court found that the domains registered and used by Ryder Ripps and his collaborators (rrbayc.com and apemarket.com) are likely to cause confusion. Furthermore, the defendants operate with bad faith intent to profit. Yuga Labs argue that they are entitled to $200,000 in statutory damages. However, the court denied this, and stated that damages would be determined at trial.
– 3) First Amendment/Rogers Defense:
Ryder Ripps and his collaborators argue that the Rogers test applies. This refers to a test that protects some uses of trademarks used in artistic works. However, the court found that the Rogers test does not apply in this case. The judge concludes that the collection uses the same images as BAYC and that they “do not express an idea or point of view”.
The marketplace listings and Ape Market website do not add any commentary. Moreover, these are all commercial activities designed to sell infringing products, not expressive artistic speech protected by the First Amendment.
The judge also adds that even if the Rogers test applied, the use of the BAYC marks is “not artistically relevant to Defendants’ ‘art.'”
– 4) Fair Use:
Ryder Ripps and his collaborators argue that nominative fair use applies. However, the court found that the defendants’ use of the trademarks is not nominative fair use. This is because that only applies in cases where the person uses the trademarks to sell the original product.
– 5) Unclean Hands:
Ryder Ripps and his collaborators argued that Yuga Labs has “unclean hands” because they paid celebrities to endorse BAYC without disclosing they were compensated. However, the judge found that these allegations do not apply to the trademark issue at hand.
– 6) The DMCA takedowns issue:
Ryder Ripps and his collaborators argued that DMCA takedown notices sent by Yuga Labs violated the DMCA. The court found that most of the DMCA notices aren’t actionable because no takedown occurred.
Of the four that did, the court found that Yuga Labs had a good faith belief that the use of the BAYC marks was infringing and that Yuga Labs had the right to send the takedown notices.
In conclusion, Yuga Labs has won a significant victory in its lawsuit against Ryder Ripps. This ensures more safety and regulation in the space. This significant win for the BAYC community sets the tone and safeguards it from bad actors.