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Yuga Labs commences proceedings over copycat NFTs

Secured NFT

Yuga Labs, the company behind the prominent Bored Ape Yacht Club (BAYC) non-fungible tokens (NFT) collection, has commenced court proceedings in the Central District of California against artist Ryder Ripps over the alleged sale of copycat NFTs.

In the cryptocurrency realm, the BAYC NFTs are regarded as the golden standard, with one jpeg selling for a record $24.4 million. More importantly, the BAYC NFTs maintain functionality, with access to Yuga Labs’ metaverse and real world utility, such as access to apparel, accessories, and private events. On the other hand, Ryder Ripps is a satirical artist who has made duplicate BAYC NFTs. According to Yuga Labs, this conduct has caused confusion amongst its user base and lowered the value of BAYC NFTs.

Interestingly, Yuga Labs does not own any registered trade marks for the BAYC brand in the US. Instead, it is relying on its pending trade mark applications since April 2021, covering the marks “BAYC”, “BORED APE”, and “BORED APE YACHT CLUB”. Several of Ryder Ripps’ copycat NFTs feature logos or wording of the aforementioned pending marks. As such, Yuga Labs is relying on its common law trade mark rights and its reliance on the BAYC brand in relation to advertising, marketing, and promotion, both in America and abroad. Ryder Ripps has responded to the proceedings and has relied on artistic free speech. In Ripps’ view, its NFT project is a critique of the BAYC collection.

It should also be noted that several BAYC NFTs are copyrighted. Yuga Labs has lodged applications with the United States Copyright Office for nine of its Bored Apes. However, Ryder Ripps has not reproduced any of those images, and more importantly, the BAYC NFT images are computer generated. It is likely that Yuga Labs did not purpose copyright infringement as it is increasingly difficult to invoke copyright infringement for non-human creative works.

As digital content is further pushed onto the blockchain and the emergence of the metaverse is spearheaded by major businesses such as Meta, this trade mark decision may have widespread implications, even to how trade mark disputes are handled in Australia.

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