- The defendants created the RR/BAYC NFT collection, which is similar to Bored Apes in terms of subjects and marketing
- They claim to have developed the collection in criticism of the original Apes, which were racist and offensive
The US District Court for the Northern District of California ruled in favor of Yuga Labs, the company behind the popular Bored Ape Yacht Club (BAYC) NFT collection, with a partial summary judgment against defendants Ryder Ripps and Jeremy Cahen, CoinDesk reported.
The defendants created the RR/BAYC NFT collection, which is similar to Bored Apes in terms of subjects and marketing. They claim to have developed the collection in criticism of the original Apes, stating that the original BAYC NFT contained memes from 4chan, an entirely anonymous, anything-goes forum, racist dog whistles, and even concealed Nazi images.
Copycats made millions in “unjust” profits
Yuga filed a lawsuit against the defendants in June last year, accusing them of intentionally creating confusion among users and making millions unfairly, while priding themselves on inflicting damage to BAYC at the same time.
The court ruled that Yuga Labs owns the valid and enforceable BAYC trademarks. It found the defendants had used BAYC images to sell imitation products without Yuga Labs' consent and in a way intended to cause confusion. Consumers were misled to buy a fake BAYC NFT due to the similar appearance.
The court also found that the defendants used the BAYC trademark unfairly, because their project deliberately misled buyers, who wanted to purchase the originals.
No monetary damages ruled
Yuga Labs demanded compensation of $200,000 for the so-called cybersquatting, but the court dismissed this claim. Damages will be determined during a pending trial.
Cahen and Ripps tried to argue that NFTs were not covered by the Lanham Act, which protects from unfair competition and governs service marks and trademarks, because they are intangible. This law also protects against copyright infringement and false advertising.
The court disagreed, with the judge arguing that virtual goods like NFTs are considered goods under the Lanham Act due to their traceable, unique, and brand-linked features.
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