On October 25, a US District Court ruled that NFT artists Ryder Ripps and Jeremy Cahen must pay Yuga Labs about $1.6 million in damages for copyright infringement. The legal battle revolves around the RR/BAYC collection, against which the company that owns the rights to Bored Ape Yacht Club (BAYC) filed a lawsuit in June 2022. Let's find out what these two collections are, the reason for the lawsuit, and the outcome.
What is Bored Ape Yacht Club (BAYC)
Bored Ape Yacht Club is one of the most popular NFT collections on Ethereum launched in April 2021. Justin Bieber and Eminem are holders of these NFTs. It consists of 10,000 NFT cards depicting bored apes with different traits: backgrounds, clothes, hats, and so on. Currently, it has the highest trading volume of all time at 1.3 million ETH among all NFT collections. The floor price for these NFTs is 28 ETH (about $50,000).
Yuga Labs created BAYC and always owned the rights to it. It also possesses major collections like CryptoPunks, Mutant Ape Yacht Club (MAYC), and Meebits.
Since May 2022, the BAYC floor price has dropped from its peak of 144.9 ETH to the current 28 ETH. This happened amid the general NFT market decline. Learn more about what is going on in the NFT market.
What is RR/BAYC and why the litigation between Ripps&Cahen and Yuga Labs started
In May 2022, artist Ryder Ripps started minting NFTs similar to BAYC but with new attributes. This “performance” was intended to draw attention to the copyright issues by recontextualising someone else's images and creating new NFTs from them. Soon, many NFT marketplaces removed the collection from their platforms due to copyright infringement concerns.
In January 2022, Ryder Ripps published an article about BAYC. He stated that the collection deliberately used racist and Nazi symbols, suggesting that this was not an accidental act by the collection’s creators.
While the article did not attract much attention at the time, it gained traction later when video blogger @Philion posted a one-hour video on YouTube based on Ryder Ripps' words. This video amassed 2M views and ignited active discussions in the community.
Yuga Labs responded to these claims in an article on June 24, 2022. The company stated that these allegations were misinformation with the purpose of “selling knockoff NFTs”. They did not directly name the RR/BAYC collection as the beneficiary, but obviously implied it was.
In July, 2022, Yuga Labs sued artists Ryder Ripps and Jeremy Cahen. Cahen was involved in the development of the NFT marketplace called “not Larva Labs”. The name plays off the name of Larva Labs, the company that owned the rights to CryptoPunks before being bought out by Yuga Labs. Not Larva Labs also launched the CryptoPhunks collection.
Why court ruled RR/BAYC is a Bored Ape Yacht Club trademark infringement
On October 25, the US District Court issued its final judgement in the copyright infringement lawsuit initiated by Yuga Labs. Ryder Ripps and Jeremy Cahen have been ordered to pay $1.6 million in damages to Yuga Labs, in addition to covering the company's attorney fees. Judge John Walter said that the actions of the defendants could not be classified as “satire” or “irony” as they were profiting from the exploitation of other people's trademarks.
Also, as Decrypt writes, the court dismissed the counterclaim that Yuga Labs used racist and neo-Nazi images in the BAYC collection. A spokesperson for Yuga Labs said, “this victory not only defeats scammers but supports creators advancing web3 experiences worldwide”.
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