A US appeals court overturned an $8.8 million judgement against artist Ryder Ripps and his business partner Jeremy Cahen, who were previously ordered to pay Yuga Labs, creator of the Bored Ape Yacht Club (BAYC) NFTs, for creating copycat NFTs. The 9th US Circuit Court of Appeals ruled on July 23 that Yuga Labs had not sufficiently proven that Ripps and Cahen's tokens would confuse buyers. The case, originally filed in June 2022, alleged trademark infringement, false advertising, and cybersquatting. Ripps and Cahen argued their works were satirical appropriation art, while Yuga Labs denied claims of racism tied to the BAYC imagery. The ruling sends the case back to federal court for a trial on trademark and cybersquatting claims.
This decision matters because it tests the boundaries of artistic expression and trademark law in the emerging NFT space. The appeals court upheld that Ripps and Cahen are not immune under First Amendment protections for art, but it also rejected the previous financial penalty, signaling that courts are still grappling with how to balance intellectual property rights with artistic satire. The outcome could set a precedent for how appropriation art involving digital assets is treated legally, affecting both artists and NFT creators in the rapidly evolving crypto-art market.