Bored Apes Earns Victory In Trademark Suit

• Jurisdiction: United States,Federal
• Law Firm: Winston & Strawn LLP
• Subject Matter: Intellectual Property, Technology, Trademark, Fin Tech
• Author: Mr Dhruva Krishna and Laura Franco
• Published date: 12 May 2023

On April 21, 2023, United States District Judge John F. Walter ruled for Yuga Labs, Inc. (Yuga) and its Bored Apes Yacht Club (BAYC) NFT collection in its trademark infringement suit against conceptual artists Ryder Ripps and Jeremy Cahen (collectively, the "Artists").¹

Yuga accused the Artists of trademark infringement over their use of Yuga's BORED APE YACHT CLUB and BAYC trademarks (the "BAYC Marks") in their own NFT collection, which they named the "Ryder Ripps Bored Ape Yacht Club" (RR/BAYC). Aggravating Yuga further, the Artists' RR/BAYC NFT collection was based on the same digital artwork as Yuga's BAYC NFT collection.

In their defense, the Artists claimed that their use of the BAYC Marks was protected by the First Amendment. Specifically, Ripps had earlier criticized BAYC for using and embedding racist, neo-Nazi, and alt-right imagery and symbolisms in its NFTs. The Artists stated that their creation of NFTs using the same artwork was a form of "appropriation art" intended to bring attention to Yuga's allegedly offensive material and to pressure Yuga to change its artwork, as well as to educate the public about NFT use.

The Court Grants Summary Judgment On Yuga's Trademark Claims

In granting partial summary judgment for Yuga, the Court confirmed Yuga's trademark rights in the BAYC Marks, then largely rejected the Artists' affirmative defenses.

First, the Court agreed that Yuga had demonstrated valid trademark rights in its unregistered BAYC Marks covering its NFTs. Shutting down the Artists' tortured argument that Yuga's BAYC Marks were ineligible for trademark protection because NFTs are not physical goods, the Court emphasized that NFTs were "virtual goods" and, therefore, use of the BAYC Mark in connection with such virtual goods satisfied the Lanham Act's "use in commerce" requirement. The Court also rejected the Artists' defense that Yuga abandoned its rights in the BAYC Marks through "naked licensing" (licensing the trademarks without controlling the quality of the licensed products), because although Yuga granted purchasers of BAYC NFTs a copyright license for personal and commercial use of the underlying artwork, Yuga had not granted any trademark licenses. Thus, the Court found that the BAYC Marks are protectable in connection with NFTs.

Second, the Court held that the Artists' use of the BAYC Marks was likely to cause consumer confusion. Engaging in a traditional application of the Sleekcraft factors², the Court found them to weigh...