A recent verdict from a U.S. District Court judge has concluded a lengthy legal battle, with NFT artists Ryder Ripps and Jeremy Cahen ordered to pay Yuga Labs approximately £1.6 million in damages, as well as cover legal fees.
This decision stems from a lawsuit initiated by Yuga Labs in June 2022, accusing Ripps and Cahen of infringing on their intellectual property with NFTs that closely resembled the Bored Ape Yacht Club (BAYC) collection, a highly valuable NFT collection in the market.
Ryder Ripps is a 36-year-old conceptual artist and creative director known for his work with prominent figures like Kanye West and Grimes, as well as brands like Nike, Red Bull, and Gucci.
When BAYC's 10,000 collection launched, a friend showed Ripps the BAYC logo alongside the Totenkopf, a skull-and-crossbones emblem associated with Nazi Germany, that he realized there might be a more sinister intention behind the collection.
Since December 2021, Ryder Ripps has been leading a campaign against the controversial BAYC collection, its parent company Yuga Labs, and its founders. Ripps alleges that BAYC, from its logo to the accessories worn by the cartoon apes, contains elements of racist imagery and connections to the online alt-right community.
This contention has led to a legal battle between Ryder Ripps and Yuga Labs, as the company sued the artist for creating copycat NFTs that Ripps claims were intended to satirize the BAYC collection.
In April 2023, A judge ruled that Ryder Ripps and Jeremy Cahen infringed on Yuga Labs' trademark after releasing their RR/BAYC NFT collection.
This verdict is significant and likely to be seen as a triumph for NFT creators who are concerned about safeguarding the intellectual property rights of their collections.
The court order highlighted the uniqueness of Yuga's litigating position compared to other trademark infringement cases, particularly because the defendants attempted to justify their use of Yuga's BAYC Marks under the guise of satire and parody without Yuga's consent.
This case stands out from the majority of trademark infringement cases due to these specific circumstances.
The court has classified this as a special case because of the obstructive and evasive behavior exhibited by the defendants during depositions and the trial, which needlessly complicated the proceedings.
This behavior further contributed to the court's determination that this trademark infringement case is indeed "exceptional."
In a comprehensive decision, the U.S. District Court Judge John Walter ordered the payment of $1.57 million in disgorgement and damages to Yuga Labs. This amount includes $1.37 million granted as disgorgement of the defendants' profits, highlighting Yuga Labs' entitlement to this sum.
An additional $200,000 was awarded as statutory damages related to cybersquatting violations.
Judge Walter also ruled that Yuga Labs has the right to recover attorney fees and costs from the NFT artists. This determination was made after the judge classified the trademark infringement case as an "exceptional case," based on the defendants' actions.
One key aspect of the case was the defendants' argument that their copycat BAYC versions were a form of "satire" and "parody."
However, Judge Walter firmly rejected this argument, asserting that the defendants had knowingly infringed upon Yuga's BAYC trademarks with the intention of profiting in bad faith.
The judge highlighted that even after a partial summary judgment was issued against them in April, the defendants continued to market and promote their copycat BAYC versions.
The lawsuit initiated by Yuga Labs against the two artists dates back to June 2022, and it has been a protracted legal battle.
During an October 16 hearing in a United States appeals court, the lawyers representing Ryder Ripps and Jeremy Cahen attempted to argue that the lawsuit should be dismissed on the grounds of free speech under California's anti-SLAPP statute.
However, their arguments did not appear to sway the three-judge panel.
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