Ninth Circuit Rules NFTs Qualify as Goods Under Lanham Act Sending Yuga Labs Case Back for Trial

The U.S. Court of Appeals for the Ninth Circuit has ruled that non-fungible tokens (NFTs) qualify as "goods" under the Lanham Act, granting them eligibility for trademark protection. This decision, issued on July 17, 2025, centers on a legal dispute between Yuga Labs—the creator of the Bored Ape Yacht Club (BAYC) NFT collection—and artist Ryder Ripps, who sold identical NFTs as "expressive appropriation art" under the RR/BAYC project. While the court rejected several of Ripps’ legal arguments, it overturned an $8 million judgment against him and remanded the case to a lower court for further proceedings [1]. The ruling establishes a precedent that NFTs can be treated similarly to physical goods in trademark law, potentially reshaping intellectual property (IP) enforcement in the digital asset space.

The court affirmed that NFTs are not inherently excluded from trademark protections, a stance Yuga Labs argues validates its efforts to defend the BAYC brand. The company’s legal team contended that Ripps’ project devalued original NFTs by creating consumer confusion, but the panel required further evidence to determine whether this confusion existed [1]. The decision leaves unresolved whether a typical NFT purchaser would associate Ripps’ work with Yuga Labs’ collection, a determination now left to the district court.

Ripps described the ruling as a "resounding legal victory," emphasizing his First Amendment rights to critique Yuga Labs’ branding through expressive art. However, the court explicitly rejected his arguments that his use of BAYC trademarks constituted "nominative fair use" or "expressive work" shielded by constitutional protections [1]. The case highlights tensions between IP rights and free expression, with the panel balancing Yuga Labs’ brand protection claims against Ripps’ artistic defenses.

The ruling’s broader implications extend beyond the parties involved. By classifying NFTs as "goods," the Ninth Circuit has created a legal framework enabling trademark holders to pursue IP violations in digital markets akin to physical commerce. This could spur increased litigation over NFTs that mimic existing brands or collections. However, the court’s emphasis on a trial to assess consumer confusion introduces nuance: unlike counterfeit goods, NFTs exist in a speculative, digital ecosystem where the line between infringement and artistic critique is often blurred [1]. The outcome may influence future cases involving NFTs and other digital assets, particularly in jurisdictions under the Ninth Circuit’s jurisdiction, which includes California, a hub for NFT innovation.

Sources:

[1] [The Block] (https://www.theblock.co/post/364012/nfts-qualify-for-trademark-protection-ninth-circuit-rules-sending-yuga-labs-case-back-for-trial)

[2] [Ninth Circuit Court of Appeals] (https://cdn.ca9.uscourts.gov/datastore/opinions/2025/07/23/24-879.pdf)