The creator of the Bored Ape Yacht Club non-fungible tokens (NFTs) needs to provide more evidence that a “satirical” version of these tokens was intended to deceive potential buyers, a U.S. appeals court stated Wednesday, overturning a lower court ruling and sending the case back for a new trial.
The U.S. Court of Appeals for the Ninth Circuit determined that the District Court’s finding that Ryder Ripps’ NFT collection harmed Yuga Labs’ trademarked NFTs requires reconsideration, although it did not comment on whether trademark infringement actually occurred—only that Yuga must better demonstrate its case under the law in the new trial.
Ryder Ripps and Jeremy Cahen, the creators of the RR/BAYC NFT collection, previously contended that their tokens were intended as a satirical response to the genuine BAYC. Yuga Labs filed a lawsuit in 2022, claiming trademark infringement and cybersquatting.
A partial summary judgment by a district judge found that Yuga owns trademarks related to its Bored Ape Yacht Club NFT collection and that Ripps’ RR/BAYC NFT collection caused confusion due to the similarities in their images. Ripps appealed the final ruling, which included an over $8 million fine to be paid to Yuga. The appeals court stated that while Yuga holds priority on the trademark, having been the first to use “the Bored Ape Yacht Club marks,” it did not prove that Ripps’ NFTs were causing confusion.
Nonetheless, Yuga Labs must go back to trial. “Yuga may ultimately prevail on these claims, but to do so it must convince a factfinder at trial,” the ruling said.
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