Ninth Circuit Reverses $9M Yuga Labs Trademark Award Citing Consumer Confusion Gaps

The US Ninth Circuit Court of Appeals has reversed a $9 million trademark infringement award granted to Yuga Labs in its case against artist Ryder Ripps and business partner Jeremy Cahen, sending the lawsuit back to a California federal court for retrial. The court ruled on July 3, 2025, that Yuga Labs failed to demonstrate sufficient evidence that Ripps and Cahen’s NFT collection, “Ryder Ripps Bored Ape Yacht Club,” caused consumer confusion with Yuga’s Bored Ape Yacht Club (BAYC) NFTs. While affirming that NFTs qualify as “goods” under US trademark law, the decision underscores the challenges of applying traditional trademark standards to digital assets and sets a precedent for future NFT-related litigation [1].

The case, which began in 2022, centered on Yuga Labs’ claims that Ripps’ NFTs were a direct copy of BAYC, a high-profile NFT collection. Ripps defended his work as a satirical critique of what he described as racist elements in Yuga’s NFTs. A federal court initially ruled in Yuga’s favor in 2023, awarding $9 million in damages after a counterclaim was dismissed. The appeals court, however, found that the lower court erred in its assessment of consumer confusion, requiring a new trial to determine whether Yuga’s claims of infringement and cybersquatting meet legal thresholds [2].

A pivotal aspect of the ruling is the judicial recognition that NFTs can be classified as trademarkable goods. The Ninth Circuit panel confirmed Yuga Labs’ trademark priority, as it was the first to commercially use the Bored Ape Yacht Club marks. This decision could empower NFT creators to pursue legal action against alleged infringers but emphasizes that such claims must meet the burden of proving actual market confusion. The court also agreed with the federal court’s earlier finding that Ripps’ use of Yuga’s trademarks did not qualify as “nominative fair use” and was not protected under the First Amendment [3].

The reversal has sparked mixed reactions. Yuga Labs co-founder Greg Solano stated on X that the ruling validates BAYC NFTs as “protectable trademarks” and expressed intent to “finish the fight in the district court.” Ripps, however, framed the decision as a “huge victory for artists who seek to make expressive meaningful work,” highlighting the tension between intellectual property rights and artistic freedom. The case now returns to the lower court for a trial focused on whether Ripps’ NFTs caused consumer confusion, with the appeals court rejecting Yuga’s claims of automatic infringement [1].

The ruling reflects the evolving legal landscape for NFTs, where courts are navigating how to balance innovation, parody, and traditional trademark protections. Analysts note that the decision’s reliance on concrete evidence of confusion means future cases will depend heavily on specific factual scenarios. For now, the case marks a significant moment in NFT legal history, illustrating the complexities of applying conventional legal frameworks to emerging technologies [3].

Sources:

[1] [Cointelegraph: Appeals Court Overturns Yuga Labs Win](https://cointelegraph.com/news/appeals-court-overturns-yuga-labs-win-ryder-ripps)

[2] [Law360: 9th Circ. Clarifies Bored Ape NFTs Are Trademarkable Goods](https://www.law360.com/appellate)

[3] [Law360: Ninth Circuit Reverses Trademark Ruling](https://www.law360.com/)