August 6, 2025

NFT’s Apes: Back in Court, Still Bored

By Emily Poler

Remember NFTs? Back in the last presidential administration, which seems a lifetime ago, a company called Yuga Labs launched Bored Ape Yacht Club (“BAYC”), a collection of 10,000 NFTs of apes decked out in yachting gear and appearing rather blasé about existence. At one point, Yuga and its bored apes were the most successful launch in NFT history, with total sales of more than $1 billion. 

As I wrote about previously, a conceptual artist named Ryder Ripps and a partner decided to critique the BAYC imagery and/or capitalize on its success by selling a collection of Ryder Ripps Bored Ape Yacht NFTs (“RR/BAYC”) NFTs. Defendants lost in District Court, but the ape fight didn’t end there. Ripps and his co-creator appealed and the case dragged its knuckles onward to the Ninth Circuit Court of Appeals, which recently issued a ruling with some interesting twists. 

Going back to the beginning of the matter, Ripps’ criticism was based on his belief that the BAYC logo and elements of Yuga’s ape images promoted racist stereotypes and incorporated Nazi and neo-Nazi imagery and ideas. For example: similarities between the BAYC and the Waffen SS logos; the ape skull on the Yuga Labs logo has 18 teeth, and 18 is code for Adolf Hitler; and the expression “surf the Kali Yuga” is used by white supremacists. 

The RR/BAYC NFTs linked to the original BAYC images, but also came with a link to Ripp’s artist’s statement and a website where he criticized the BAYC images. 

As will surprise no one reading this blog, in June 2022, Yuga sued Ripps and his co-creator, alleging that the RR/BAYC NFTs violated the Lanham Act which, generally speaking, prevents unfair competition and prohibits parties from trading on the name and goodwill of another. (Yuga sued on other grounds too, but there’s not enough space here to get into all that.) In their defense, Ripps et. al. asserted that Yuga did not have any enforceable trademark rights, and that their use of the BAYC trademarks were protected under the nominative fair use doctrine and the First Amendment. The District Court was not impressed with these defenses and eventually found that “‘Defendants’ use of Yuga’s BAYC [m]arks was likely to cause confusion’ and that Defendants intentionally infringed Yuga’s BAYC [m]arks.” 

Defendants appealed and the Ninth Circuit Court of Appeals recently issued its ruling. But before turning to that, I’ve got to highlight this line in its decision: “[g]rappling with this nascent technology, we hold that Yuga’s FTs are not merely monkey business…” I mean, it’s a good pun (for a court); also, it’s funny/sad that it views something that already feels like it’s from the distant past as a “new” technology.

Okay, back to the ruling: On the plus side for Yuga, the Ninth Circuit affirmed the District Court’s rejection of some of Defendants’ defenses and arguments. For example, the Ninth Circuit rejected Defendants’ claim that NFTs are not “goods” and, therefore, not subject to the protections of the Lanham Act. The Court’s conclusion here is not terribly surprising, as the Lanham Act covers “any goods and services,” and, therefore, is extremely broad. It also rejected Defendants’ claims that their use of the BAYC marks was protected under either the nominative fair use doctrine or as expressive expression under the First Amendment. On the first issue — which allows someone to use another’s trademark to refer to the other party’s goods (as in comparative advertising) — the Court found the Defendants didn’t use the BAYC marks merely to describe or reference Yuga’s products, but to capitalize on Yuga’s success, which is not permitted. 

On the other hand, the Appeals Court found the lower Court wrongly concluded that Defendants’ use of the BAYC marks were likely to cause consumer confusion, and found it erred in granting Yuga’s motion for summary judgment. There are a couple of things I find interesting about this. For starters, the Appeals Court found that the addition of “RR” to “BAYC” to create the moniker “RR/BAYC” could be enough for a jury to conclude that RR/BAYC was not the same as BAYC. It also held that the District Court oversimplified things when it concluded that both parties used identical marketing channels — NFT marketplaces and Twitter — to sell their NFTs. Here, the Appeals Court admonished the District Court for overlooking that most of the RR/BAYC NFTs were sold on rrbayc.com, which is different from Yuga’s bayc.com.

What to make of all of this? Well, it’s amazing that in 2025 people are still fighting over NFTs. While it probably makes sense for Defendants to try to get out from having to pay Yuga any money, it seems like Yuga should have just settled this years ago as this appeal had to have been costly, and I wonder how much cash it will actually ever recover from Defendants.

There’s something else in this decision that I found interesting. In general, trademark infringement and unfair competition claims hinge, at least partly, on whether consumers — i.e. people buying stuff — are confused as to the source of the products. Here, in a couple of places, the Ninth Circuit noted that bots were confused by the similarity of BAYC and RR/BAYC. While the Court didn’t really address this issue other than to note it, given the omnipresence of our algorithmic overlords, I wonder whether at some point how bots respond to particular online cues will come into play when analyzing consumer confusion. I bet we’ll find out!