A U.S. District Judge in California issued a judgment on Wednesday in favor of Yuga Labs, creators of the popular Bored Ape Yacht Club, against Ryder Ripps (“Ripps”) and Jeremy Cahen (“Cahen”) and awarded Yuga Labs over $1.5 million in damage, the amount the court said Ripps and Cahen made in profits from the sale of Ryder Ripps Bored Ape Yacht Club which the court said infringed on Yuga Labs’ trademark.
According to court documents shared with Decrypt by a Yuga Labs spokesperson, the defendants argued that their use of Yuga’s BAYC trademarks was not infringement but “satire” and “parody.”
"After the court ruling against Ryder Ripps and Jeremy Cahen for infringing Yuga Lab's intellectual property, today they've been ordered to cease all sales and marketing of their counterfeit NFTs,” the Yuga Labs spokesperson said in an email. “They must pay $1.575 million in damages, Yuga's attorneys' fees, transfer their fake apes' smart contract, and relinquish related online assets.”
In the ruling, Judge John Walter granted Yuga Labs’ request the defendants pay $200,000 in damages for the cybersquatting violations, $100,000 per domain, and issued a permanent injunction against the defendants.
“Having weighed all the factors in light of the undisputed evidence, the Court concludes that defendants acted with a bad faith intent to profit,” the filing said. “Defendants do not have any trademark or other intellectual property rights in the domain names and the domain names do not consist of the legal names of defendants.”
According to court documents, Ripps and Cahen argued that the Bored Ape Yacht Club logos or “marks” were protected under the First Amendment and fair use. The court denied Ripps and Cahen’s motion to dismiss and granted Yuga Labs a summary judgment for trademark infringement and cybersquatting claims.
Cybersquatting refers to registering a domain name of a well-known company or brand with the intent to sell it for a later profit. Court documents pointed to rrbayc.com and apemarket.com as the domain names in question.
“[The defendants’] only interest in the domain name is to divert customers who may have been searching for [p]laintiff’s mark to their own commercial website,” the court said. “In addition, defendants concealed their registration of the domain names through the use of a proxy registration service.”
“This victory not only defeats scammers but supports creators advancing web3 experiences worldwide," Yuga Labs’ spokesperson said.
The court also dismissed the defendants' counterclaim that Yuga Labs made false accusations of infringement and used racist and neo-Nazi imagery in its BAYC NFTs.
“With respect to Yuga’s false designation of origin claim, the Court determined that, although the BAYC Marks are unregistered, Yuga owns the BAYC Marks and those Marks are valid and Protectible,” the court said.
The court ruled that Ripps and Cahen did not have a good faith reason for prior use of the domains because they registered the domains after Yuga had already launched the Bored Ape Yacht Club NFTs collection.
Launched in April 2021, the Bored Ape Yacht Club is a collection of 10,000 randomly generated NFTs on the Ethereum blockchain. Non-fungible tokens (NFTs) are cryptographically unique tokens linked to digital and physical content, providing proof of ownership.
In addition to joining an exclusive community, Bored Ape Yacht Club holders are given unlimited copyright to use their apes in their media or designs. Last summer, Family Guy star Seth Green paid $300,000 to recover a stolen Bored Ape NFT lost in a phishing attack.
Edited by Ryan Ozawa.