U.S. Court Orders New Trial in Bored Ape Yacht Club NFT Trademark Case

The U.S. Court of Appeals for the Ninth Circuit has overturned a previous ruling favoring Yuga Labs, creator of the Bored Ape Yacht Club (BAYC) non-fungible tokens (NFTs), in its lawsuit against artist Ryder Ripps. The appeals court ruled Wednesday that Yuga Labs must better demonstrate claims that Ripps’ “satirical” RR/BAYC NFT collection misled buyers, sending the case back to the lower court for retrial.

Yuga Labs, which launched the popular BAYC NFT collection, filed a lawsuit in 2022 accusing Ripps and collaborator Jeremy Cahen of trademark infringement and cybersquatting. The duo argued their work was a parody, meant to criticize the BAYC brand. A district court previously sided with Yuga Labs, awarding the company over $8 million in damages and confirming its trademark ownership.

However, the appellate court clarified that while Yuga Labs holds priority over the BAYC trademarks, it failed to sufficiently prove that Ripps’ NFTs created actual consumer confusion — a key requirement for trademark infringement under U.S. law. The court did not rule on the ultimate question of infringement but emphasized that Yuga must convince a factfinder in a new trial.

This case underscores growing legal challenges in the NFT space, where issues of trademark rights, parody, and digital art ownership are increasingly intersecting. The outcome could have broader implications for how courts handle disputes involving NFT collections and intellectual property in the rapidly evolving Web3 market.