Yuga Labs, creators of the famed Bored Ape Yacht Club (BAYC), sued digital creator Ryder Ripps for allegedly scamming consumers into purchasing fake Bored Ape NFTs.
Earlier in June, Yuga Labs, creators of the famed Bored Ape Yacht Club (BAYC), sued digital creator Ryder Ripps for allegedly scamming consumers into purchasing fake Bored Ape NFTs. This is after Ripps, a vocal critic of the BAYC, launched his own NFT collection called RR/BAYC, which featured identical Bored Ape images that he did not purchase.
Since the case deals with the use of duplicate NFTs without any permission from original owners, the result could determine how creators and investor can protect their Intellectual Property and monetise these assets in the future.
Some background on BAYC and Ryder Ripps:
BAYC is an NFT collection of 10,000 profile pictures, each portraying a Bored Ape wearing different costumes and accessories. In little over a year, it has emerged as a multi-billion-dollar business, with celebrity buyers like Madonna, Justin Bieber, Jimmy Fallon, Snoop Dogg, Serena Williams, Eminem and Shaquille O'Neal.
On the other hand, Ryder Ripps is a programmer, creative director and self-labelled "conceptual artist" who even appeared on the Forbes 30 Under 30 list in 2016.
In January 2022, Ripps sparked a controversy when he tweeted his research on BAYC founders and their alleged Nazi connections. He even compared the BAYC logo with the Nazi Totenkopf emblem and said they looked quite alike.
The Bored Ape founders lashed back in a blog post calling the salvo "a crazy disinformation campaign". Yuga Labs rubbished the claims and said that none of their projects has racist undertones.
Then in May 2022, Ripps took things one step further and launched his own NFT project titled RR/BAYC. According to the official website, the collection "uses satire and appropriation to protest and educate people regarding The Bored Ape Yacht Club and the framework of NFTs".
Yuga Labs filed a complaint with the California federal court on June 24, 2022. It alleged that Ripps and his team have been infringing the BAYC trademark, falsifying the NFT's origin, cybersquatting, and slapping "the very same trademarks that Yuga Labs uses to promote and sell authentic BAYC NFTs" on "copycat NFTs".
BAYC asserts that Ripps started infringing its trademark in May 2022, when "exact replicas" of the Bored Ape NFTs started showing up online with "the very same marks to promote their RR/BAYC NFT collection".
Yuga has also gone on to allege that Ripps has not only duplicated the NFT artwork but also put them up on sale on "the same NFT marketplaces that Yuga Labs uses to sell its Bored Ape NFTs, such as OpenSea". This is tantamount to "elementary level trademark infringement," according to the complaint.
Ryder countered the argument through a Twitter post, saying, "the lawsuit grossly mischaracterises the RR/BAYC project – people who reserved RR/BAYC NFT (Non-Fungible Token) understood that their NFT was being minted as a protest against and parody of BAYC".
While duplication is always a risk in the creative business, a brand always tries to protect the uniqueness of its creations through IP (intellectual property) rights. Therefore, what is fascinating here is that there is no mention of copyright infringements anywhere in Yuga's complaint. Why is this so? It is a question still surrounded by speculation.
The problem with NFTs and copyright
While the purchase and authentication of an NFT are pretty straightforward on the blockchain, the transfer of rights is a bit trickier. When you buy an NFT, the seller may not tell you whether you're buying a genuine, copyrighted piece of art or a copy of someone else's work.
Another case that highlights this is the Weird Whales NFT project. It was considered the next big thing in the NFT space and sold out in nine hours. However, it was later discovered that the author didn't own the copyright to the image the work was based on. It's a similar loophole that Ripps has exploited through his RR/BAYC collection.
According to him, "the current terms of ownership set forth by Yuga Labs to BAYC token holders are unclear and do not meet current copyright standards". It could be why the RR/BAYC collection was re-listed on Foundation after Ripps successfully countered BAYC's Digital Millennium Copyright Act (DMCA) takedown request.
Per the RR/BAYC website, "clearly defining what we are buying when we purchase an NFT" is the project's main objective. And so, the lawsuit's outcome should give us a better understanding of what NFTs stand for when it comes to digital ownership. At the very least, it could ensure that issuers of NFTs take better steps to ensure IPs from unlawful appropriation. Hopefully, it will also give users some guidelines on what they should look out for when buying an NFT.