US Appeals Court Overturns $9 Million Judgment Against Ryder Ripps in Yuga Labs NFT Lawsuit

A recent decision by the Ninth Circuit Court of Appeals has significantly altered the landscape of the ongoing legal battle between non-fungible token (NFT) conglomerate Yuga Labs and artist Ryder Ripps, along with his business partner Jeremy Cahen.

The court overturned a previous $9 million judgment awarded to Yuga Labs, sending the case back to a California federal court for a full trial on the core issues of trademark infringement and cybersquatting.

US Appeals Court Overturns $9M Lawsuit

The crux of the dispute lies in Ripps and Cahen’s NFT collection, provocatively titled “Ryder Ripps Bored Ape Yacht Club,” which Yuga Labs alleges is a direct and infringing copy of their highly successful Bored Ape Yacht Club (BAYC) collection.

Notably, the NFT platform initiated legal proceedings in 2022, asserting that the Ripps collection was likely to cause consumer confusion, thus harming their brand and market position.

However, the three-judge panel of the Ninth Circuit found that Yuga Labs had not yet sufficiently demonstrated the likelihood of consumer confusion stemming from the Ripps NFT collection. This determination led to the reversal of the substantial $9 million judgment initially awarded to Yuga Labs.

Ryder Ripps, in a statement, hailed the ruling as a “huge victory for artists who seek to make expressive, meaningful work.” Ripps has consistently maintained that his collection serves as a form of satire and commentary on what he alleges are racist undertones present within Yuga Labs’ BAYC imagery.

Yuga Labs’ Positive Outlook

Yuga Labs co-founder Greg Solano acknowledged the setback on X (formerly Twitter), stating:

 The Ninth Circuit confirmed: BAYC NFTs are protectable trademarks, which is an important win for every NFT holder. We’ll now finish the fight in the district court, where the judge already fined the RR BAYC founders $9m+ in damages. We’ll win in the district just like we won before.

Despite the reversal of the financial judgment, the ruling did offer Yuga Labs a notable victory. The three-judge panel affirmed that Yuga’s NFTs qualify as “goods” under US trademark law.

This legal precedent, with potentially far-reaching consequences for the NFT space, clarifies that trademark law protects NFT collections. It enables NFT creators to pursue legal action against entities that create similar or infringing collections.

Furthermore, the court concluded that Yuga Labs possesses trademark priority due to being the first to commercially utilize the Bored Ape Yacht Club trademarks.

Ninth Circuit judges agreed with the lower court’s finding that Ripps and Cahen did not make nominative fair use of Yuga Labs’ trademarks, sending the case back to federal court for trial.