The Yuga Labs v. Ryder Ripps case is shaking up NFTs and trademarks. In this episode of The Briefing, Weintraub attorneys Scott Hervey and Tara Sattler unpack the Ninth Circuit’s ruling on whether NFTs count as “goods,” why the First Amendment defense fell flat, and what it all means for the future of digital asset law.

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Show Notes:

Scott: Was the Ryder Ripps Bored Ape Yacht Club NFT series a social commentary on the popular Board Ape Yacht Club and an exposure of its racist tropes? Or was it just an attempt to capitalize off of Bayes' popularity for profit? These questions were front and center in the lawsuit between Yuga Labs, the creators of the Board Ape Yacht Club NFT. Boys, say that 10 times fast. Project and Ryder Ripps, a popular visual artist. This case resulted in a bench trial award to Yuga Labs of $8 million in damages. But the appeal of that award to the Ninth Circuit raised some very interesting issues, named Mainly the question of whether NFTs are goods that fall under the Lanham Act.

I'm Scott Hervey, a partner with Weintraub Tobin, and today I'm joined by my partner and frequent briefing contributor, Tara Sattler. We are taking a deep dive into the fascinating intersection of digital art, blockchain, and Intellectual Property on today's installment of The Briefing. Tara, welcome back to the briefing.

Tara: Hi, Scott. Great to be here, as always.

Scott: It's good to have you here. Let me ask you a question. Did you ever buy any NFTs?

Tara: I did not.

Scott: I did not either. But I think we're still qualified to talk about this case, even though we weren't suckers, I'm sorry, consumers of NFTs.

Tara: Yes, I agree.

Scott: Let's start with a summary of the Yuga Labs case. Why don't you tell us what exactly happened here?

Tara: Sure. Yuga Labs Inc. Created the Bored Ape Yacht Club or B-A-Y-C NFT collection, which is one of the most recognized NFT collections globally. The B-A-Y-C collection was associated with, very early with celebrity owners, including Snoop Dogg, Justin Bieber, and Jimmy Fallon. Each NFT in this collection is associated with a unique cartoon soon, Bored Ape Image, and purchasing an NFT not only grants rights to the ape art, but also membership in what's been described as a strange combination of gated online community, stock shareholding group, and art appreciation society. Yuga Labs launched BAYC in April of 2021, quickly selling out the collection and generating over $2 million. They also developed various trademarked brand signifiers like Bored Ape Yacht Club and Bayayc.

Scott: Now, this was right as NFTs took off, some promoting NFTs as an investment category and some just promoting it as hype. There was a huge rush to the adoption of NFT art, and NFTs gained cultural relevance as status symbols. That's where Ryder Ripps and Jeremy Cahan, hope I pronounce his last name correctly.

Tara: Comment. Prefithely. In late 2021, Ryder Ripps, a visual artist, started criticizing Yuga Labs, alleging they used neo-nazi symbolism, alt-right dog whistles, and racist imagery in the B-A-Y-C NFTs.

Scott: That's right. According to Ripps, the Bayy-C Ape Skull logo resembled the Totenkopf emblem of the Nazi SS Stormtroopers. Ripps compiled his findings on a website and used art to satirize the Bayy-C brand. In May 2022, Ripps and Kehen created their own collection called Ryder Ripps Board Ape Yacht Club, which was linked to the exact same ape images with some slight changes and a...