Cryptocurrency

Yuga Labs Secures $9M Victory in Landmark Bored Ape Copyright Case

Yuga Labs, creators of the iconic Bored Ape Yacht Club (BAYC) NFT collection, recently won a major legal victory against artists Ryder Ripps and Jeremy Cahen over copyright infringement. In a landmark judgment, Ripps and Cahen were ordered to pay nearly $9 million in damages and penalties to Yuga Labs.


TLDR

  • Yuga Labs won an $8.9 million copyright infringement case against artists Ryder Ripps and Jeremy Cahen for creating NFTs mimicking the Bored Ape Yacht Club collection.
  • The court ruled that Ripps and Cahen infringed on Yuga Labs’ intellectual property rights and trademarks. They must pay damages, legal fees, transfer domains and NFTs to Yuga Labs.
  • This sets an important legal precedent upholding copyright protections for NFTs and digital assets. It shows such laws will be enforced seriously in this emerging space.
  • Despite Yuga Labs’ legal victory, the Bored Ape Yacht Club NFT floor price has hit near all-time lows below 25 ETH, compared to a 2021 peak of 128 ETH.
  • Cahen plans to appeal the $9 million penalty in the Ninth Circuit Court in California, so the legal dispute may continue further.

The federal court dismissed the defendants’ counterclaims and ruled decisively in favor of Yuga Labs, the owner of the intellectual property rights and trademarks associated with the top-tier BAYC collection. This judgment sets an important precedent upholding copyright protections for NFTs and emphasizes that standard IP laws apply equally in the emerging digital asset space.

The core of the dispute lies in the ‘RR/BAYC’ NFT collection launched by Ripps and Cahen in early 2022. Their project closely mimicked the highly valuable Bored Ape Yacht Club collection, playing on and benefitting from BAYC’s brand value. However, it infringed on trademarks and IP owned solely by Yuga Labs.

Yuga Labs sued the artists in May 2022 for false designation of origin, cybersquatting, and copyright infringement under the US Federal Trademark Act. After months of legal proceedings, the court ruled unequivocally in Yuga’s favor, ordering Ripps and Cahen to pay $1.57 million in damages and legal fees.

In a court filing on February 2nd, 2023, however, the artists were slapped with a dramatically increased penalty of close to $9 million in total damages. This includes compensation for illegal profits, lawyers’ fees, recovery of court costs, and additional damages for irreparable brand harm caused by their infringing actions.

Ripps and Cahen must also permanently give up all websites, social media accounts, NFTs, and promotional material associated with their collection to Yuga Labs. This is for destruction, disposal or any action Yuga deems suitable, stripping the artists of any gains from their unauthorized use of BAYC’s intellectual property. The strict verdict conveys the gravity of copyright infringement despite the digital medium.

For Yuga Labs, this judgment is a major win establishing the enforceability of trademark rights in the Web3 space. However, their flagship NFT collection is simultaneously facing challenging times. In an ironic dichotomy, while Yuga celebrates legal vindication of the BAYC brand value, the NFT floor price has cratered close to an all-time low.

From record highs of nearly 130 ETH in 2021 amid feverish speculation, the current floor price wallows around 25 ETH. This mirrors the asset class’ broader struggles with dwindling trading volumes and demand since 2022’s crypto winter.

While assertions of IP rights mark a step forward, the very foundations of value and ownership assurances in digital collectibles seem on shaky ground as prices unravel. Yuga may have protected the brand, but economic realities are testing the longevity of perhaps the most iconic NFT collection.

This long-running copyright dispute seems set for continuation as Cahen has declared plans to appeal the crushing $9 million ruling. The case may escalate to the Ninth Circuit Court of Appeals in California if his plea is accepted, extending the legal wrangles between the artists and Yuga Labs.

The post Yuga Labs Secures $9M Victory in Landmark Bored Ape Copyright Case appeared first on Blockonomi.

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