Yuga Labs Bored Ape Yacht Club $9M Win Against Ryder Ripps Overturned, Must Better Prove Trademark Infringement

In a significant legal development, the Ninth Circuit Court of Appeals overturned a lower court ruling in the ongoing trademark infringement lawsuit between Yuga Labs, creators of the Bored Ape Yacht Club (BAYC) NFTs, and Ryder Ripps, the artist behind the RR/BAYC NFT collection. The appeals court vacated the lower court’s judgment, which had awarded Yuga Labs over $8 million in damages, and remanded the case for a new trial.

The core issue centers on whether Ripps’ RR/BAYC collection, presented as a satirical commentary on the original BAYC NFTs, constitutes trademark infringement. While the district court had found in favor of Yuga Labs, determining that the similarity between the two collections caused consumer confusion, the appeals court disagreed with the assessment of the evidence.

The appeals court acknowledged Yuga Labs’ prior trademark rights on the “Bored Ape Yacht Club” marks, establishing their priority. However, it found that Yuga Labs had failed to adequately demonstrate that Ripps’ satirical NFTs actually caused consumer confusion, a crucial element in proving trademark infringement. The court did not dismiss the possibility of Yuga Labs ultimately prevailing, but stressed the need for more compelling evidence at a new trial.

The original ruling had granted Yuga Labs a partial summary judgment, recognizing their trademark ownership and concluding that Ripps’ collection caused marketplace confusion due to visual similarities. This decision, including the substantial monetary award, was challenged by Ripps. The appeals court’s decision emphasized that, although visual similarities existed, the intention behind Ripps’ work—claimed to be satirical—needed to be further examined in relation to the likelihood of consumer confusion. The court essentially ruled that Yuga Labs had not met the legal burden of proof for proving that the RR/BAYC collection intentionally misled buyers or caused actual confusion in the marketplace.

The case now returns to the district court for a new trial, where Yuga Labs will have the opportunity to present more substantial evidence demonstrating consumer confusion stemming from the alleged infringement. The outcome of this retrial will significantly impact both the legal precedent surrounding satire and NFTs and the financial ramifications for both parties involved.