On April 21, 2023, the central district of California issued a 22-page ruling in the case of Yuga Labs, Inc. v. Ripps et al. The case centered around the infringement of copyrights and trademarks by Ryder Ripps’ RR/BAYC collection. The court granted Yuga Labs a Motion for Summary Judgment in false designation of origin and cybersquatting claims, as per Jessica Neer McDonald, trademark and copyright attorney, and founder of the IP law firm NeerMcD PLLC.
In a case between Yuga Labs and Ryder Ripps and Jeremy Cahen, Yuga Labs won a Motion for Summary Judgment in false designation of origin and cybersquatting claims. Yuga Labs, creator of the Bored Ape Yacht Club (BAYC) NFT collection, alleged that the defendants created an infringing collection called Ryder Ripps Bored Ape Yacht Club (RR/BAYC). The court found that the defendants had misused Yuga Labs’ trademarks and ordered injunctive relief and monetary damages. The ruling sets a precedent for legal protections in the context of digital ownership and trademarks. It is important to note that members of nftculture own Yuga assets
What this means for the broader NFT and web3 ecosystem?
This ruling has far-reaching implications for the NFT industry and digital ownership as a whole. False designation of origin and cybersquatting are illegal practices that are no longer tolerated in the digital space. This court decision provides clarity on trademarks and sets a precedent for legal protections in the context of digital ownership.
The BAYC marks are used in commerce, as required under trademark law, and the court rejected the claim that Yuga Labs had transferred or abandoned its trademark rights through naked licensing and failure to report. The defendants’ defense that their RR/BAYC project was “art” as commentary on Yuga’ Labs’ alleged racist messages and imagery was also rejected by the court.
Yuga Labs v. Ryder Ripps et al – Yuga Labs' prevails on Summary Judgment on false designation of origin + cybersquatting claims.
Yuga is entitled to monetary damages + injunctive relief w/ amount & exceptional case determination (for enhanced damages + atty fees) tbd. /1
— NeerMcD.eth
(@NeerMcD) April 22, 2023
Furthermore, the court ruled that NFTs are, in fact, goods for purposes of the Lanham Act, which requires goods to be tangible for liability to apply. This decision was based on the precedent set in Hermes International v. Rothschild, which concluded that the Lanham Act does not require goods to be tangible for liability to apply. This means that NFTs are more than just ownership receipts and have specific uses and values that are dependent on the consumer.
The significance of this ruling cannot be overstated. Yuga Labs’ Bored Ape Yacht Club is one of the premier collections in the NFT space, and this decision provides legal protections for creators and collectors alike. It sets a precedent for future legal cases and clarifies the legal status of NFTs and digital ownership.
Link to the case minutes
Overall, this ruling emphasizes the importance of trademark and copyright protection in the digital space. It also highlights the need for clear legal frameworks to govern the rapidly evolving NFT industry. As more and more companies and individuals explore the world of NFTs, legal protections will be necessary to ensure the continued growth and success of this emerging industry.
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