In a recent development, a United States district court judge has issued a verdict, compelling nonfungible token (NFT) artists Ryder Ripps and Jeremy Cahen to pay a total of $1.57 million in disgorgement and damages, as well as covering legal fees to Bored Ape Yacht Club (BAYC) creator Yuga Labs. This ruling effectively concludes a protracted NFT lawsuit centered around allegations of copyright infringement in the realm of NFT art.
This judgment, dated October 25, follows a partial summary judgment granted on April 21 in favor of Yuga Labs, who had filed a complaint against Ripps and Cahen, the defendants. Yuga Labs had claimed that these artists had violated copyright laws by creating copycat versions of its BAYC collectibles.
District court Judge John Walter has awarded Yuga Labs $1.37 million, finding that the NFT firm was entitled to a disgorgement of the profits generated by the defendants. In addition, an extra $200,000 has been granted in statutory damages related to cybersquatting violations.
Furthermore, the judge has ordered the NFT artists to cover Yuga Labs’ attorney fees and costs, deeming the trademark infringement an “exceptional case.” Judge Walter noted that a trademark case is typically considered exceptional when one party’s actions can be described as “malicious, fraudulent, deliberate, or willful.”
Judge Walter also rejected the defendants’ argument that their copycat BAYC versions were intended as “satire” or “parody.” He ruled that the defendants had knowingly infringed upon Yuga’s BAYC trademarks with the intent of profiting from them. Notably, the defendants continued to promote and market their copycat BAYC versions even after the partial summary judgment was issued against them in April.
The lawsuit against these two artists was initially filed by Yuga Labs in June 2022. In a recent hearing on October 16, held in a United States appeals court, the legal team representing Ripps and Cahen attempted to argue that the lawsuit should be dismissed on the grounds of free speech, citing California’s anti-SLAPP statute. However, the three-judge panel did not seem persuaded by the arguments presented by the defense.
BAYC stands as one of the most valuable NFT collectibles available on the NFT marketplace OpenSea. Since April 2021, it has achieved an impressive trading volume of 1.32 million Ether (ETH), equivalent to $2.38 billion, with an average floor price of 27.4 ETH ($49,200), according to data from OpenSea.