A California federal judge recently made a significant ruling in a case involving Yuga Labs, a prominent blockchain company known for creating popular non-fungible token (NFT) collectibles. The judge concluded that Yuga Labs is entitled to substantial compensation and legal fees from a conceptual artist and his business partner who copied the Bored Ape NFT art.
The Judgment and Damages
In a decision on October 26, Judge John Walter of the U.S. District Court determined that Yuga Labs should receive approximately $1.6 million in damages from Ryder Ripps, the conceptual artist, and Jeremy Cahen, his business partner. The court found that Ripps and Cahen had copied Yuga’s NFT art and attempted to profit from it under the guise of a satirical art project criticizing alleged racist elements in Yuga’s works.
“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.” – Federal Judge John Walter
Furthermore, the court also ruled that Ripps and Cahen must pay Yuga Labs all the profits they gained from their copied NFTs. The judge dismissed their defense of satire, stating that their actions were a deliberate attempt to exploit Yuga’s success.
Additional Consequences and Reconsideration
In addition to the damages, Judge Walter awarded Yuga Labs attorney’s fees and an extra $200,000 for cybersquatting. The judge ordered Ripps and Cahen to cease selling the copied NFTs and transfer any related digital assets and social media accounts to Yuga Labs.
Ryder Ripps and Jeremy Cahen’s attorney, Louis Tompros, expressed disagreement with certain aspects of the judge’s decision and stated their intention to appeal the ruling. The case is currently under reconsideration by the 9th U.S. Circuit Court of Appeals, which takes into account California law protecting free speech.
Judges Skeptical About Free Speech Defense
Prior to this ruling, Ripps and Cahen’s attorney faced challenges convincing a panel of judges at the United States Court of Appeals for the Ninth Circuit to dismiss the lawsuit filed by the Bored Ape Yacht Club against their clients. The judges focused their analysis on the secondary sale of the copied NFTs and expressed doubt regarding the argument that the knock-off Bored Ape NFTs were sold as a form of protest against alleged hidden anti-Semitic imagery in the original collection.
“I’m still not seeing it,” – Circuit Judge Morgan Christen
The attorney contended that the case should be dismissed based on the grounds of free speech. However, the panel of judges sought a clearer principle to determine the permissibility of the legal action.
The lawsuit between Yuga Labs and Ripps/Cahen initially began in June 2022 when Yuga Labs accused them of trademark infringement, false advertising, cybersquatting, and other charges. The ruling by Judge Walter marks a significant step forward for Yuga Labs in protecting its intellectual property rights in the world of NFTs.
