The NFT World copyrights saga continues with a new win in favor of virtual collectibles! In a very expected fashion, Yuga Labs came on top in their lawsuit against BAYC’s copycat NFT collection, the RR/BAYC NFT collection by conceptual artist and creative director Ryder Ripps and his business partner Jeremy Cahen. Let’s get right into it!
At the beginning of 2022, 2 BAYC copycat projects released one so-called “Phunky Apes Yacht Club” and another “Phayc”. It’s worth noting that both were delisted from OpenSea and other marketplaces without a fuss for violating copyright infringement laws.
It’s worth noting that there are so many clashes in the NFT world regarding artwork ownership, copyrights, and possible infringements. However, Yuga Labs does state that any owner of Bored Ape is given the right to use the said ape to manufacture merchandise, open up trademark stores, etc…
However, this doesn’t mean we can use the Bored Ape NFT to birth a completely new essentially stolen NFT collection like the Yuga Labs copycat lawsuit we’re gonna discuss today.
So, what’s the backstory here?
What Led To The Yuga Labs’ Copycat Lawsuit?
The Yuga Labs copycat lawsuit has been a long-standing legal dispute since mid-2022. It started when Yuga Labs first released BAYC as an NFT collection, conceptual artist Ryder Ripps shrugged off the whole release, and made a joke out of the bizarre off-putting Apes depicted as “Art”.
In detail, he criticized the artwork. Even going so far as to call it a hidden agenda hiding subliminal Nazi symbolism and racism. I know, dramatic much? He went on to say that the whole NFT movement is a spreading disease that is and I quote “ruining the internet.”… This was the flame that lit the whole Yuga Labs Lawsuit fire.
I mean, look, we understand that NFT art is far from the eloquent fine art we’ve seen in the old days like the Renaissance era. But, you can’t just deem other people’s ideas and business ventures as irrelevant as you please.
Plus, NFTs are an investment. Meaning, they go far beyond the art itself. Basically, the community, utility, and connections you make along the way are what gives it its value. So, before you go criticizing the surface-level ‘art’, think twice…
The Birth of RR/BAYC NFTs
Fast forward to BAYC gaining traction and blowing up as the OG NFT project on the blockchain. Ripps and Jeremy Cahen decided to do their own thing. They didn’t change their whole stance about the whole ‘NFTs are silly’ approach. Instead, they released a mock-up copycat collection, the RR/BAYC NFTs.
In detail, Ryder created the project after re-minting Bored Ape #3100 in an attempt to allegedly test the boundaries. He wanted to ‘evaluate’ the meaning of digital images within a new paradigm of IP law, copyright, computer-generated images, and Non-Fungible Tokens.
Basically, it was not intended to push forward the NFT agenda and spread the digital collectibles fanbase. Quit the opposite actually, and this partly triggered the Yuga Labs lawsuit itself. First and foremost, Ripps had argued that he copied the NFTs to criticize the company’s ‘racist’ and ‘anti-Semitic’ symbolism in a quote-unquote satiric manner.
Also, Ryder Ripps and his business partner Jeremy Cahen’s intentions were to ‘question’ the whole NFT copyright scenario. Not to mention their attempt at claiming that since NFTs are intangible, they automatically were not covered by the Lanham Act (A law that regulates trademarks, service marks, and unfair competition).
But the facts remain that they were purposefully tarnishing the BAYC brand name in their wake. And as we can all predict, this wasn’t a permissible use of Yuga Labs’ copyrights with their Apes in the eyes of the law.
The Outcome of The Yuga Labs Lawsuit
As expected, Yuga Labs won the intellectual property lawsuit. In detail, the court’s District Judge ruled that the defendant’s use of BAYC imagery did not fall within the categories of fair use or artistic expression according to the Rogers Test. Obviously…
Moreover, the majority of factors in an eight-factor legal test used to determine whether the RR/BAYC NFTs were likely to cause consumer confusion weighed in favor of Yuga Labs.
So, U.S. District Judge John F. Walter determined that the company was entitled to damages and injunctive relief, but the exact amount would be determined at trial. However, he denied Yuga Labs’ motion for “enhanced damages”.
This is a summary if you’re interested in the findings:
Summary judgement in favor of yuga labs in RR/BAYC case just set legal precedent that nfts are goods (like baseball cards) and NOT securities 🤯 pic.twitter.com/PyxVdYGcIH
— NFT POWER RANKINGS (@nftpowerranking) April 22, 2023
Shaping The Future of NFT Copyrights
According to the company’s spokesperson, this Yuga Labs lawsuit was a win for the entire Web3 industry (not just the company itself) to hold scammers and counterfeiters accountable. And we totally agree. Not only did this lawsuit cost the perpetrators a lot of money, but it also shed light on what you can and can’t do with your NFT art.
Let’s recall how many copyright/trademark infringement lawsuits unfolded in the Web3 realm. For example, the Hermes trial went against Artist Rothschild deemed his MetaBirkens at fault. On the other hand, Bored Ape Kennel Club had to change its logo for imitating an ‘Easy Drawings Guide’ tutorial. And finally, the Quantum NFT ownership case…
What I am trying to say here is that the Yuga Labs copycat lawsuit won’t be the last we hear in Web3. And as you can see, the balance doesn’t always tip in favor of digital collectibles; the cases vary, and the verdicts are more than plenty. So, what does this call for?
Much clearer laws and regulations regarding NFT copyrights. Basically, we need obvious clear regulations on what defines digital ownership, and what the limits to this ownership actually are.
As always, stay tuned for more!