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

The U.S. Ninth Circuit Court of Appeals has overturned a $9 million trademark judgment previously awarded to Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) NFT collection, in its dispute with artist Ryder Ripps. The appeals court ruled that Yuga Labs failed to conclusively demonstrate that Ripps’ satirical RR/BAYC project caused consumer confusion, a critical element in trademark infringement claims. The decision mandates a retrial in the lower court, where Yuga Labs must now present more concrete evidence to substantiate its allegations of brand harm. The ruling also affirmed the classification of NFTs as “goods” under U.S. trademark law, a precedent-setting development for the NFT market [1].

The case centers on Ripps’ 2022 launch of the RR/BAYC NFT collection, which he described as a parody critiquing BAYC’s cultural significance. Yuga Labs initially prevailed in 2025, with the district court finding that the RR/BAYC NFTs’ visual similarities and naming conventions misled buyers, warranting an $8.8 million damages award [2]. However, the appeals court emphasized that the lower court erred by relying on summary judgment, which bypassed a full trial. The appellate judges highlighted the need to assess factual disputes, such as the intent behind Ripps’ project and its actual impact on consumers, in a courtroom setting [3].

The decision underscores the legal challenges of applying traditional trademark frameworks to digital assets. While the court acknowledged Yuga Labs’ right to protect its brand, it stressed the importance of balancing intellectual property rights with artistic freedom. This tension is particularly acute in the NFT space, where parody and transformative works often blur the lines between infringement and creative expression. Legal experts note that the ruling reflects broader debates about regulating decentralized, global digital markets where brand enforcement is complicated by blockchain’s immutable and distributed nature [4].

For the NFT industry, the case signals both opportunities and uncertainties. Classifying NFTs as goods provides a clearer legal foundation for trademark protection, potentially encouraging brands to enter the space. However, the appeals court’s skepticism of Yuga Labs’ evidence raises the bar for proving harm in similar cases, requiring plaintiffs to demonstrate tangible consumer confusion rather than abstract brand dilution. This could deter speculative lawsuits but may also empower smaller creators to challenge aggressive trademark enforcement [5].

The outcome also highlights risks for startups and independent artists. The lack of clear guidelines on parody or transformative works in NFT contexts leaves many in a legal gray area, where large entities with greater resources may exploit loopholes to stifle innovation. The decentralized nature of blockchain further complicates enforcement, as smaller players may lack the means to monitor or respond to potential infringements [6].

As the retrial looms, the case remains a pivotal moment in defining how brand rights operate in the digital realm. Its resolution will influence future litigation strategies, regulatory approaches, and the valuation dynamics of NFTs. If Yuga Labs fails to prove its case in the retrial, it could undermine the perceived value of high-profile NFT collections, affecting investor confidence. Conversely, a successful defense of trademark rights could set a precedent for stricter brand protections, reshaping the landscape for digital art and crypto assets [7].

Sources:

[1] [The NFT Battle That Challenges Brand Rights in the Digital Realm](https://en.coin-turk.com/the-nft-battle-that-challenges-brand-rights-in-the-digital-realm/)

[2] [US Appeals Court Overturns $8.8 M. Win for Bored Ape](https://www.artnews.com/art-news/news/us-appeals-court-yuga-labs-bored-ape-nfts-ryder-ripps-1234748184/)

[3] [Ninth Circuit Overturns $9M NFT Judgment Citing No](https://www.ainvest.com/news/ninth-circuit-overturns-9m-nft-judgment-citing-consumer-confusion-affirms-nfts-trademark-goods-2507/)

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

[5] [Yuga Labs Ruling: Does This Help or Hurt Small Creators?](https://www.onesafe.io/blog/nft-trademark-law-innovation-vs-monopoly)

[6] [Ninth Circuit Reverses $8M NFT Trademark Win for Bored](https://www.law.com/therecorder/2025/07/23/ninth-circuit-reverses-8m-nft-trademark-win-for-bored-ape-creator/)

[7] [Ninth Circuit Reverses $9M Yuga Labs Trademark Award](https://www.ainvest.com/news/ninth-circuit-reverses-9m-yuga-labs-trademark-award-citing-consumer-confusion-gaps-2507/)