A U.S. District Judge in California on Wednesday entered a judgment in favor of Yuga Labs, makers of the popular Bored Ape Yacht Club, against Ryder Ripps (“Ripps”) and Jeremy Cahen (“Cahen”) and awarded Yuga Labs more than $1 .5 million in damages, the amount the court found Ripps and Cahen earned in profits from the sale of the Ryder Ripps Bored Ape Yacht Club, which the court found infringed on Yuga Labs’ trademark.
According to court documents shared with Declutter through a Yuga Labs spokesperson, the defendants argued that their use of Yuga’s BAYC trademarks was not infringement, but “satire” and “parody.”
“Following the court’s ruling against Ryder Ripps and Jeremy Cahen for infringement of Yuga Lab’s intellectual property, they were today ordered to cease all sales and marketing of their counterfeit NFTs,” the Yuga Labs spokesperson said in an e-mail. “They must pay $1,575 million in damages, Yuga’s attorneys’ fees, turn over their fake monkeys’ smart contract, and relinquish related online assets.”
In the ruling, Judge John Walter granted Yuga Labs’ request that the defendants pay $200,000 in damages for the cybersquatting violations, $100,000 per domain, and issued a permanent injunction against the defendants.
“After weighing all factors in light of the undisputed evidence, the Court concludes that Defendants acted in bad faith with the intent to profit,” the filing said. “Defendants have no trademark or other intellectual property rights in the domain names, and the domain names do not consist of Defendants’ legal names.”
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According to court documents, Ripps and Cahen argued that the Bored Ape Yacht Club logos or “marks” were protected under the First Amendment and fair use. The court denied Ripps and Cahen’s motion to dismiss and granted Yuga Labs summary judgment on trademark infringement and cybersquatting claims.
Cybersquatting refers to registering a domain name of a well-known company or brand with the intention of selling it for later profit. Court documents pointed to rrbayc.com and apemarket.com as the domain names in question.
“[The defendants’] any interest in the domain name is to distract customers who may have been searching [p]the plaintiff’s brand on its own commercial website,” the court said. “Additionally, Defendants concealed their registration of the domain names by using a proxy registration service.”
“This win not only defeats scammers, but supports creators advancing Web3 experiences worldwide,” said the Yuga Labs spokesperson.
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The court also rejected the defendants’ counterclaim that Yuga Labs had made false claims of infringement and used racist and neo-Nazi imagery in its BAYC NFTs.
“With regard to Yuga’s claim of false designation of origin, the Court determined that, although the BAYC marks are not registered, Yuga owns the BAYC marks and that these marks are valid and protectable,” the court said.
The court ruled that Ripps and Cahen had no good faith reason for prior use of the domains because they registered the domains after Yuga had already launched the Bored Ape Yacht Club NFTs collection.
Launched in April 2021, Bored Ape Yacht Club is a collection of 10,000 randomly generated NFTs on the Ethereum blockchain. Non-fungible tokens (NFTs) are cryptographically unique tokens linked to digital and physical content that provide proof of ownership.
In addition to joining an exclusive community, Bored Ape Yacht Club holders receive unlimited copyright to use their monkeys in their media or designs. Last summer, Family Guy star Seth Green paid $300,000 to recover a stolen Bored Ape NFT that was lost in a phishing attack.