The Ninth Circuit Court of Appeals has decided to transfer the case of Yuga Labs against the creators of the parody NFT collection RR/BAYC — artist Ryder Ripps and developer Jeremy Cahen — to a jury trial, overturning the previous ruling of the lower court.
This is reported by Finway
Why the Yuga Labs and RR/BAYC Case is Precedent-Setting for the NFT Market
The case concerns the RR/BAYC NFT collection, created in 2022 as a parody of the well-known Bored Ape Yacht Club series. Yuga Labs owners claimed that the defendants’ actions could mislead consumers and violated the company’s intellectual property rights. In April of this year, Yuga Labs initiated a separate lawsuit to enforce the collection of nearly $400,000 in cryptocurrency from Jeremy Cahen.
The lower court had previously ruled in favor of Yuga Labs for $9 million, but the appellate body found that these conclusions were made without the involvement of a jury, even though some disputed facts required their consideration.
“Some factors indicated the likelihood of confusion, some did not, and some were neutral,” the court’s ruling stated.
Legal Status of NFTs: Protectable Products
A key aspect of the court’s decision was the recognition that NFTs now officially hold the status of trademarks, which are protected under the American Lanham Act. The court rejected the defense’s arguments regarding the excessive intangibility of digital tokens, recognizing them as full-fledged intellectual property objects.
“The Ninth Circuit confirmed: BAYC NFTs are protectable trademarks. This is an important victory for every NFT owner,” wrote Yuga Labs co-founder Greg Solano on X (formerly Twitter).
Additionally, the court supported the dismissal of counterclaims from Ripps and Cahen, including complaints regarding allegedly false statements made by Yuga Labs when removing content about intellectual property rights.
The essence of the conflict was that RR/BAYC criticized Bored Ape Yacht Club for allegedly using hate symbols, but Yuga Labs categorically rejected such accusations. The previous ruling required the defendants to transfer all NFTs and intellectual property rights, as well as to cover million-dollar legal expenses.
The hearings are taking place against the backdrop of a revival in the NFT market: trading volumes of leading collections such as CryptoPunks, Bored Apes, and Pudgy Penguins continue to grow, and the total capitalization of the segment has exceeded $6 billion in the past month, doubling in a short period.