A district court judge in the United States has instructed nonfungible token (NFT) creators Ryder Ripps and Jeremy Cahen to compensate Bored Ape Yacht Club’s creator Yuga Labs a total of $1.57 million in disgorgement and damages, in addition to legal expenses, concluding the protracted “copycat” NFT litigation.
The order issued on Oct. 25 comes after a partial summary judgment was granted in favor of Yuga Labs on April 21, when the company asserted that Ripps and Cahen, the defendants, breached copyright regulations by producing imitation versions of its Bored Ape Yacht Club (BAYC) items.
District court Judge John Walter awarded Yuga Labs $1.37 million after determining that the NFT firm was entitled to recover the defendants’ profits. An extra $200,000 was granted in statutory damages related to cybersquatting infringements.
Yuga Labs v. Ryder Ripps et al – Notes from the Court's Findings of Fact and Conclusions of Law
Yuga is awarded $1,375,362.92 in Ds profits, $200,000 in statutory damages, and attorneys' fees and costs (amount TBD). A permanent injunction is also issued against Ds.
1/ pic.twitter.com/2dTiuWpZSA— NeerMcD.eth (@NeerMcD) October 26, 2023
Yuga Labs is also entitled to recover legal fees and expenses from the NFT creators after the judge ruled that the trademark infringement represented an “exceptional case.”
“A trademark case is typically deemed exceptional for the purpose of awarding attorneys’ fees when a party has engaged in behavior that can be described as ‘malicious, fraudulent, deliberate or willful,’” the judge remarked.
Judge Walter also dismissed the defendants’ claim that the imitation BAYC versions were “satire” and “parody,” deciding that the defendants knowingly infringed Yuga’s BAYC trademarks with an intent to profit in bad faith.
He further observed that the defendants continued to advertise and promote their imitation BAYC versions even after the partial summary judgment was issued against them in April.
Yuga Labs initiated the lawsuit against the two creators in June 2022.
During an Oct. 16 hearing in a United States appeals court, Ripps and Cahen’s attorneys attempted to argue that the lawsuit should be dismissed based on free speech protections under California’s anti-SLAPP law. However, the three-judge panel did not seem convinced by the attorneys’ arguments.
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BAYC ranks among the most valuable NFT collectibles on the NFT marketplace OpenSea.
Since April 2021, it has generated 1.32 million Ether (ETH) or $2.38 billion in trading volume, with an average floor price of 27.4 ETH ($49,200), according to OpenSea.
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