The US Ninth Circuit Court of Appeals reversed Yuga Labs’ $9 million reward in its trademark infringement suit against artist Ryder Ripps.
A US appeals court overturned a $9 million judgment for non-fungible token conglomerate Yuga Labs in its long-running lawsuit against artist Ryder Ripps and business partner Jeremy Cahen.
On Wednesday, the Ninth Circuit Court of Appeals stated that Yuga Labs had yet to prove its allegation that Ripps and Cahen’s NFT collection — which Yuga claimed directly ripped off its flagship Bored Ape Yacht Club collection — would likely cause consumer confusion.
The three-judge panel sent the lawsuit back to a California federal court for a trial on Yuga Labs’ claims of trademark infringement and cybersquatting.
Yuga sued Ripps and Cahen in 2022, alleging their NFT collection, “Ryder Ripps Bored Ape Yacht Club,” directly copied Yuga’s similarly-named collection. Ripps claimed his collection is a satire of racist imagery that Yuga supposedly used in its collection.
In a statement via an email associated with him, Ripps told that the ruling was a “huge victory for artists who seek to make expressive meaningful work.”
Subsequently, on Wednesday, Yuga co-founder Greg Solano posted on X that “we’ll now finish the fight in the district court.” Yuga Labs, however, did not immediately respond to a request for comment.
Landmark Ruling Establishes Legal Precedent
In a win for Yuga, the three-judge panel also ruled that Yuga’s NFTs are “goods” under US trademark law, which sets a legal precedent potentially allowing, for example, NFT collections to sue other similar collections.
The judges concluded that Yuga “had trademark priority because it was the first to use the Bored Ape Yacht Club marks in commerce.”
Solano lauded the win on X, describing Bored Ape NFTs as “protectable trademarks,” an important win for every NFT holder.
Case Returns to Trial Court
In 2023, a federal court had ruled in favor of Yuga, finding that Ripps and Cahen’s NFTs were likely to create market confusion. Yuga initially received $1.6 million in damages, which later grew to $9 million after Ripps and Cahen lost a counterclaim.
The Ninth Circuit reversed the $9 million reward, finding that Yuga’s trademark infringement and cybersquatting claims “did not prove as a matter of law that defendants’ actions would likely cause consumer confusion.”
A federal court trial was said by the three-judge panel to be needed to determine whether the Ripps NFTs infringed on Yuga’s trademark.
