Yuga Labs vs. Ryder Ripps for “fake” Bored Ape NFTs

After the release of a YouTube videos around allegations of racism against the NFT project Bored Ape Yacht Club (BAYC), the news from the orbit of the parent company Yuga Labs began to roll over. YouTuber Philion hooked up with the digital artist about six months ago Ryder Ripps together to jointly investigate the allegations. On his site Ripps drew parallels to far-right ideology and supposed hidden clues within the ecosystem of the Bored Ape Yacht Clubs attentive.

Yuga Labs doesn’t like that at all. The company speaks of character assassination, raises allegations of scams and complains of trademark infringement – because Ryder Ripps himself launched a modified NFT collection of bored monkeys, which Philion praises in his video for the Bored Apes. Now Ripps has to answer in court.

Yuga Labs vs. Ryder Ripps: The Battle for NFTs

Yuga Labs’ attorneys allege trademark infringement, unfair competition, misrepresentation of sources and unjust enrichment on the part of Ripps. That goes from the legal action emerging on June 24th at the US District Court for the Central District of California was submitted.

Ripps copied everyone NFTs of the Bored Ape Yacht Club collection and minted the 10,000 monkeys again under the name RR/BAYC. All monkeys were then for sale for 0.15 ETH on the NFT platform OpenSea. According to Ripps’ site the RR versions are sold out and have even temporarily overtaken the main project in terms of volume.

At 10,000 NFTs, Ripps should have made an estimated $1.8 million from the collection – “unfair profit” according to Yuga Labs.

He brazenly promotes and sells these RR/BAYC NFTs with the exact same branding that Yuga Labs uses to promote and sell authentic Bored Ape Yacht Club NFTs.

Yuga Labs indictment

Cancellation of the Bored Apes

Yuga Labs argues that Ripps not only wants to resell the exact same artworks, but also the allegedly infringing NFTs on “the same NFT marketplaces that Yuga Labs uses to sell its Bored Ape NFTs, such as OpenSea”, has offered. This constitutes “elementary trademark infringement” under the states federal Lanham Act. The law prohibits the sale of the same or related products, in the same location, under the same brand names. It is intended to protect consumers from poor quality of the goods. Yuga Labs claims that all of these violations happened in the RR case.

The BAYC founders suspect Ripps wants to devalue the Bored Apes “by flooding the NFT market with its own counterfeit NFT collection.”

Copycat NFTs: Is it all just satire?

Ryder Ripps sees it differently. He refers to his artistic freedom and describes his work as satire. On his site he takes a stand and explains that he was already re-minting the CryptoPunk #3100 on the Ethereum Blockchain. The original image token was sold on March 11, 2021 for a record $7.58 million.

At the time, by re-minting the CryptoPunk, Ripps wanted to test the limits and meaning of digital images within a new paradigm of IP law, copyright, computer-generated images, and non-fungible tokens. As before, the files associated with an NFT are still infinitely copyable, but the token behind them is not.

Current ownership conditions are unclear to BAYC owners and do not conform to current copyright standards. A clear definition and description of what is sold as an NFT and what an NFT actually is is one of the main goals of Ripp’s work.

Legal classification

The crypto space has been very unregulated for years, especially NFTs and the Metaverse. Christian Solmecke, attorney at the law firm WBS LAW examined the case for BTC-ECHO from the point of view of German copyright and trademark law. Can Ripps refer to artistic freedom and must copyright then be interpreted in this way? “This legal question has long been discussed on the basis of the phenomenon of Appropriation art discussed and has not been finally resolved,” says Solmecke. And further: “It would also be possible that the new barrier from § 51a UrhG takes effect here, which allows caricature, parody and pastiche. Ultimately, however, these questions could only be answered conclusively by a court in individual cases,” the legal expert continues.

Since the current case comes from the USA, Solmecke adds: “In the Appropriation Art case, a US court agreed with a photographer who sued the Appropriation Art artist Richard Prince for copyright infringement.”

Solmecke adds that the lawsuit does not relate to copyright, but to trademark law. “Ripps has copied, promoted and sold trademarked images. In doing so, he used it for commercial purposes and, in principle, as a trademark, inadmissibly. In that case, the trademark owners would basically have claims for injunctive relief and claims for damages. However, it is also possible here in individual cases that artistic freedom prevails if a trademark is used purely artistically. Ultimately, a court must decide whether this is also the case in this case,” says Solmecke.