Yuga Labs Gets Partial Win in Bored Apes NFT Trademark Case (1)

Bored Ape Yacht Club nonfungible token maker Yuga Labs Inc. convinced a California federal judge to toss several counterclaims brought by artists Ryder Ripps and Jeremy Cahen, who Yuga has accused of selling knock-off Bored Ape NFTs.

Judge John F. Walter of the Central District of California struck Ripps and Cahen’s counterclaims alleging intentional and negligent infliction of emotional distress under California’s statute barring strategic lawsuits against public participation. Walters also awarded Yuga attorneys’ fees and costs related to the stricken claims.

Ripps and Cahen didn’t allege “extreme or outrageous” behavior by Yuga Labs sufficient to maintain the counterclaims, Walter wrote. “Instead, the alleged conduct in this case amounts to garden-variety litigation-related activities, public relations activities, and a handful of miscellaneous communications incidental to the public dispute between the parties.”

Yuga Labs originally sued the two artists in June 2022, claiming that Ripps scammed consumers into purchasing fake Bored Ape NFTs using Yuga Labs’ registered trademarks. Last December, the artists appealed Walter’s decision to deny their Anti-SLAPP motion to dismiss the suit. Ripps alleged that the lawsuit was meant to silence him and said his “RR/BAYC” NFTs are protected free speech that critique neo-Nazi and alt-right imagery that he believes is featured in Yuga Labs’ NFTs.

The Bored Ape NFT collection, which was released in 2021, depicts images of cartoon apes and achieved large popularity with over $2 billion in total sales with several celebrities buying the NFTs—including Justin Bieber, Snoop Dogg, and Mark Cuban. The theft of Seth Green’s Bored Ape, among other events related to the NFT collection, prompted a number of legal questions regarding ownership of the tokens and the intellectual property rights that go with them.

The decision shows Ripps and Cahen “were trying to improperly use their counterclaims to silence Yuga Labs’ efforts to protect its Bored Ape Yacht Club brand,” Yuga Labs said in an emailed statement. “And it shows what has always been clear: this litigation is about defendants’ obvious and blatant theft of Yuga Labs’ trademarks.”

Walter refused to strike Ripps and Cahen’s counterclaim that Yuga Labs knowingly and materially misrepresented that the RR/BAYC NFTs infringed its copyright by filing takedown notices under the Digital Millennium Copyright Act. He said the issue is better resolved through a motion for summary judgment.

In its statement, Yuga Labs said that its motion for summary judgment, filed under seal earlier this month, “demonstrates that the single counterclaim moving forward is similarly meritless and we expect the Court will ultimately dismiss it.”

The company recently settled a separate lawsuit against Thomas Lehman, an NFT market developer it said was a central part of Ripps’ RR/BAYC team.

Representatives for Ripps and Cahen didn’t immedately respond to requests for comment.

The case is Yuga Labs, Inc. v. Ripps et al, C.D. Cal., No. 2:22-cv-04355, counterclaims stricken 3/17/23.