NFT

Yuga Labs wins copyright lawsuit, awarded nearly $1.6 million in damages, also eligible to recover attorney's fees

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Yuga Labs wins copyright lawsuit, awarded nearly $1.6 million in damages, also eligible to recover attorney

A U.S. district court judge ruled on the 25th that NFT artist Ryder Ripps and Jeremy Cahen must pay nearly $1.6 million in damages and legal fees to Yuga Labs in the BAYC copyright lawsuit. The judge stated that the artists clearly violated copyright law, maliciously misappropriated trademarks, and profited from it.

Yuga Labs Ordered to Pay Nearly $1.6 Million

The latest court documents from a U.S. district court have revealed that NFT creators Ryder Ripps and Jeremy Cahen have been found guilty of unlawfully using Yuga Labs' trademark for commercial purposes. The former has been ordered to pay a total of $1.57 million in damages to the latter, bringing an end to the copyright infringement case.

The case began in June 2022, when Yuga Labs filed a lawsuit against the two artists, accusing them of creating counterfeit versions of the Bored Ape Yacht Club (BAYC) collectibles.

In his ruling, Judge John Walter stated that Ripps and Cahen had violated copyright laws and were ordered to pay Yuga Labs $1.37 million in damages for infringement and $200,000 for domain name hijacking damages. The company is also entitled to recover the defendants' profits.

Furthermore, the judge ruled that this trademark infringement case was exceptional, allowing Yuga Labs to seek attorney's fees and related costs from Ripps and Cahen:

Trademark infringement cases are typically considered exceptional when one party's position can be described as willful fraud, allowing the other party to recover attorney's fees.

Additionally, the judge dismissed the defendants' claim that their counterfeit BAYC products were made in the spirit of "imitation and satire," noting that the defendants continued to promote their products to the market throughout the trial period. The judge concluded that the defendants intentionally infringed on Yuga's BAYC trademark with the intent to profit from it.

Prior to this, in July, Yuga Labs had collaborated with the blockchain integration protocol SaaSy Labs to launch the IP verification tool "Made by Apes," allowing club members to create peripheral products using Yuga Labs' IP and obtain a unique identifier through the tool to identify the product's identity and prevent counterfeiting.

Proliferation of Counterfeit NFTs

According to Cointelegraph, in March of this year, there were over 8 million counterfeit NFTs circulating in the market related to the top 20 NFT projects by market value. Among them, Yuga Labs' BAYC products accounted for over 4 million counterfeit products.

Previously, Fortune had warned about the rampant counterfeiting of NFTs, citing the basic norms of the U.S. Copyright Office, which states that copying or creating non-original NFT products may involve infringement of the original author's intellectual property rights and may require substantial compensation:

Generally, any original work, whether it is music, art, books, or any other tangible work, is protected by federal law.

Do NFT Purchases Include Intellectual Property Rights?

Previous reports have indicated that although BAYC, MAYC, and Koda are all released by Yuga Labs, they have different proposed and interpreted legal rights terms.

While Yuga Labs grants NFT buyers significant freedom and rights to create derivatives, they still retain full ownership, rights, and intellectual property of the artwork, only authorizing its use for collectors.

However, NFT collectors are granted certain common rights, including personal property rights at the time of purchase and intellectual property rights to their derivative products, allowing them to file lawsuits in case of infringement.

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