The company behind the multi-billion dollar Bored Ape Yacht Club (BAYC) NFT collection has sued an artist they claim was selling copies of their NFTs and making millions from the business. Yuga Labs accuses Ryder Ripps of scamming users into buying its NFTs using the company’s images and many of its trademarks.
Since their launch in 2021, BAYC NFTs have become extremely popular, fueled by a wave of purchases from celebrities such as Madonna, Snoop Dogg, Steph Curry, Jimmy Fallon, and more. They peaked in April of this year, with the floor price, or the lowest price at which you can buy a BAYC NFT reaching over $400,000. This pushed Yuga Labs’ valuation to $4 billion when it raised $450 million in March this year.
BAYC’s success attracted many imitators, with Ryder Ripps being the most prominent to date. On his website, Ripps claims that his work “uses satire and appropriation to protest and educate people regarding The Bored Ape Yacht Club and the framework of NFTs”.
Yuga Labs is not convinced and has now gone to court for trademark infringement. He filed a lawsuit in the Central District of California, demanding a jury trial against Ripps, Jeremy Cahen and other defendants.
On Twitter, Yuga Labs says the lawsuit aims to “put an end to the continued infringement and other unlawful attempts to harm us and the BAYC community.”
(2/2) …we and the BAYC community have taken legal action against those responsible. We will continue to explore and pursue all legal options available to us.
— Yuga Laboratories (@yugalabs) June 25, 2022
Yuga Labs dismissed Ripps’ claims that his work is for satirical purposes only, saying he “conveniently reaps millions in ill-gotten profits from sales of RR/BAYC NFTs by using Yuga Labs’ trademarks to perform these sales”.
“Copying is not satire, it is theft. And lying to consumers isn’t concept art, it’s deception.
The concept artist argued that buyers know full well that they are not buying the original BAYC NFTs. Before purchasing his copycat NFTs, buyers must agree to his site’s terms which state that “By purchasing Ryder Ripps artwork in the form of an NFT, you understand that this is a new mint of BAYC imagery, recontextualizing it for educational purposes for purposes of protest and satirical commentary.
Yet Yuga Labs claims the artist caused irreparable damage and injury with incalculable loss of clientele. He accuses Ripps of false advertising, unfair competition, trademark infringement, unjust enrichment, intentional interference with potential economic advantage, and more. He seeks an injunction and damages.
The NFT Ownership Debate
The Yuga Labs v. Ryder Ripps lawsuit taps into a two-year debate: who owns an NFT and what constitutes infringement?
NFT skeptics called them overpriced JPEGs, the best known Elon Musk famous make fun of them using a collection of BAYC NFT as his Twitter profile photo, even though the images belonged to people who paid millions for them at a Sotheby’s auction.
Yuga Labs does not take Ripps’ offense lightly. Founder Gordon Goner (a pseudonym) called Ripps a “demented troll” in a recent blog post while defending the company’s legal actions.
However, Ripps has defended his actions and maintained that he is fair against Yuga Labs, who he claims lied to millions of people who imitated their Bored Apes.
In an interview two weeks ago, Ripps declared“The craziest thing to me is that this company has made billions of dollars and sold people on a complete lie, which is that they own the commercial rights to these designs. What they really mean is they just don’t care who uses them and they won’t sue anyone.
NFT markets have already taken a stand against Ripps, with OpenSea, which is the biggest, removing them from its platform. He claimed the reason was due to an intellectual property infringement complaint. The collection had sold for $3.5 million on OpenSea before being retired. Foundation, another NFT marketplace, also removed the collection after receiving a request from the Digital Millennium Copyright Act.
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