In a recent development, a United States District Court Judge has ordered NFT artists, Ryder Ripps and Jeremy Cahen to pay a total of $1.57 million in disgorgement and damages. The fine is to be paid to the Bored Ape Yacht Club creator Yuga Labs.
Quick Take:
- Yuga Labs wins a copyright lawsuit against Ruder Ripps and Jeremy Cahen.
- The two artists will pay $1.57 million in damages and they will also be liable for the legal fees.
- The Court dismisses all counter-accusations against the NFT platform.
The decision has put an end to an extended NFT lawsuit between the two parties. Ripps and Cahen will also pay the legal fees along with the $1.57 million penalty fee to Yuga Labs. The copycat NFT lawsuit was one of the most prominent ones in the NFT landscape, as Yugaa Labs filed the case against the two artists in June 2022.
Previously, the partial summary judgment of April 21 came in favor of Yuga Labs, as the company claimed that Ripps and Cahen violated copyright laws. The defendants were accused of making copycat versions of Yuga Lab’s Renowned BAYC NFT collectibles.
In the recent order, Judge John Walter has awarded $1.37 million to Yuga Labs. Thus, confirming that the NFT platform should have a disgorgement of the defendants’ profits. Moreover, the court also awarded another $200K to Yuga Labs in statutory damages amid cybersquatting violations by the defendants.
The ruling said,
“Having weighed all the factors in light of the undisputed evidence, the Court concludes that defendants acted with a bad faith intent to profit. Defendants do not have any trademark or other intellectual property rights in the domain names and the domain names do not consist of the legal names of defendants.”
As per further details, Yuga Labs will also be able to recover attorney fees and costs from NFT artists. Ripps and Cahen will have to transfer the smart contracts of their allegedly copied NFTs and give up their online assets.
Ripps and Cahen Fail to Satisfy the Court in Yuga Labs’ Case
The defendants argued in court that their use of BAYC’s design was not copying but a parody. Plus, they claimed that BAYC logos were used fairly. However, the Judge dismissed this motion and made a decision in favor of Yuga Labs.
As mentioned earlier, the Court also moved against the defendants for cybersquatting claims. It is when someone registers a domain to use the name of a recognized brand or company, aiming to sell it later for a profit. Thus, the court ordered the defendants to pay $100,000 per domain. The domains in question were rrbayc.com and apemarket.com.
The Court said,
“[The defendants’] only interest in the domain name is to divert customers who may have been searching for [p]laintiff’s mark to their own commercial website. In addition, defendants concealed their registration of the domain names through the use of a proxy registration service.”
Moreover, the Court noted that Ripps and Cahen continued the marketing of their copycat BAYC collectibles even after the partial judgment in April. The Court also dismissed the accusations of infringement and use of racist and neo-Nazi imagery by Yuga Labs.
The defendants also tried to get the lawsuit void under free speech in California’s anti-SLAPP statute. However, the appeals court did not accept the request.
