Ninth Circuit Overturns $9M NFT Judgment Citing No Consumer Confusion Affirms NFTs as Trademark Goods

The U.S. Ninth Circuit Court of Appeals has reversed a $9 million judgment awarded to Yuga Labs in its trademark dispute with artist Ryder Ripps and his partner Jeremy Cahen over NFTs. The appeals court ruled that Yuga Labs failed to demonstrate that Ripps’ “Ryder Ripps Bored Ape Yacht Club” collection caused consumer confusion with Yuga’s original Bored Ape Yacht Club NFTs. The case will return to a California federal court for a trial to reassess claims of trademark infringement and cybersquatting [1]. While the monetary judgment was overturned, the court affirmed that NFTs qualify as “goods” under U.S. trademark law, establishing a legal precedent with broader implications for NFT intellectual property rights [2]. Yuga Labs co-founder Greg Solano stated the company will continue its legal battle in district court, emphasizing the importance of protecting its trademarks [3].

Ripps, who defended his work as satirical and critical of what he described as racist elements in Yuga’s original designs, called the appellate ruling a “huge victory for artists who seek to make expressive meaningful work” [4]. The decision highlights the tension between trademark enforcement and free expression in the NFT space, as courts grapple with balancing creativity and commercial rights.

The ruling also clarified Yuga Labs’ trademark priority, citing its earlier use of the Bored Ape Yacht Club marks in commerce [5]. This aspect of the decision may influence future disputes by reinforcing the applicability of traditional trademark doctrines to digital assets. However, the appeals court emphasized that the outcome of the broader legal questions, including whether Ripps’ NFTs violate Yuga’s rights, will require further factual evaluation during a trial [6].

The case is part of a broader legal landscape in the crypto and NFT sectors, where courts are increasingly addressing the intersection of digital innovation and established legal frameworks. For instance, Roman Storm, co-founder of Tornado Cash, faces charges related to alleged control over illicit funds, while MIT-educated brothers Anton and James Peraire-Bueno will go on trial for a $25 million Ethereum exploit [7]. These parallel cases underscore the evolving challenges regulators and courts face in adapting to the complexities of decentralized technologies.

The reversal of the Yuga Labs judgment signals a pivotal moment for NFT-related litigation. By rejecting the initial award but affirming the protectability of NFTs under trademark law, the Ninth Circuit has set a nuanced standard that could shape future cases. Businesses and creators in the NFT space may now need to navigate this precedent, balancing legal protections with the risks of stifling artistic expression.

Source: [1] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[2] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[3] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[4] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[5] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[6] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]

[7] [Appeals Court Reverses Yuga Labs NFT Judgment] [https://coinpaper.com/10132/appeals-court-reverses-yuga-labs-nft-judgment]