Ryder Ripps’ BAYC Lawsuit Defense Falters: Judges Remain Unconvinced

The legal saga between NFT artist Ryder Ripps and Yuga Labs, the creators of the Bored Ape Yacht Club (BAYC), continues to unfold, and the latest chapter reveals a challenging landscape for Ripps. In a recent court hearing, judges appeared unconvinced by Ripps’ defense against trademark infringement claims. Let’s dive into the details of this intriguing case that has the NFT and legal worlds watching closely.

Ryder Ripps’ Anti-SLAPP Motion: A Bold Move

Ryder Ripps, along with Jeremy Cahen, found themselves in the crosshairs of Yuga Labs after launching their own NFT collection, RR/BAYC. Yuga Labs swiftly filed a lawsuit alleging trademark infringement, false advertising, and unfair competition. In response, Ripps’ legal team employed a strategic maneuver: an anti-SLAPP motion. But what exactly is anti-SLAPP, and why did Ripps use it?

Understanding Anti-SLAPP Statutes

SLAPP stands for Strategic Lawsuit Against Public Participation. These lawsuits are often used to intimidate and silence critics by burdening them with legal costs. Anti-SLAPP laws, like the one in California, are designed to protect free speech by allowing defendants to quickly dismiss lawsuits that are primarily aimed at chilling protected expression. Ripps’ argument hinged on the idea that his RR/BAYC project was a form of protest art and commentary on Yuga Labs and the BAYC project itself.

“Avant-Garde Exercise” or Trademark Infringement? Ripps’ Core Argument

Represented by WilmerHale partner Thomas Sprankling, Ripps’ defense centered around portraying the RR/BAYC NFT sales as an “avant-garde exercise.” The argument was that these NFTs were not merely copies for profit but a form of artistic expression and critique of BAYC, specifically targeting what Ripps’ team alleges are anti-Semitic undertones within the original collection. Sprankling argued that Yuga Labs’ lawsuit was an attempt to stifle this form of artistic speech and should be dismissed under California’s anti-SLAPP statute.

Key points of Ripps’ defense:

• Protest Art: RR/BAYC was positioned as protest art intended to critique and comment on the BAYC project.
• Free Speech: The anti-SLAPP statute should protect this form of artistic expression, even if it involves using existing imagery.
• Intimidation Tactic: Yuga Labs’ lawsuit is an attempt to intimidate and silence artistic criticism through costly litigation.

Judges Skeptical: “I’m Still Not Seeing It.”

However, during the October 17th hearing before the Ninth District Court of Appeals, the three-judge panel appeared far from convinced. Judges Anthony Johnstone and Morgan Christen voiced significant skepticism towards Sprankling’s arguments. Judge Johnstone pointedly noted the near-identical nature of the RR/BAYC NFTs to the originals, stating, “He was selling the same images, on the same marketplaces, on virtually indistinguishable NFT identifiers.” Judge Christen’s blunt “I’m still not seeing it” further underscored the judicial panel’s lack of persuasion.

The judges’ skepticism seemed to stem from a focus on the commercial aspect of the RR/BAYC project. They appeared to differentiate between artistic criticism and the act of selling NFTs that were strikingly similar to the BAYC NFTs, raising questions about trademark infringement beyond the realm of pure artistic expression.

Why are Judges Unimpressed? Key Challenges for Ripps’ Defense

Several factors seem to be contributing to the judges’ apparent reluctance to side with Ripps:

1. Commercial Aspect vs. Pure Art: The sale of RR/BAYC NFTs on the same marketplaces as BAYC NFTs, using similar identifiers, blurs the line between protest art and commercial exploitation of trademarks.
2. Direct Copying: The judges highlighted that Ripps was selling “the same images,” raising questions about transformative use, a key element in fair use defenses.
3. Trademark Law Core Principles: Trademark law is designed to protect brands and prevent consumer confusion. The judges may be concerned about setting a precedent that allows for near-identical copies to be sold under the guise of protest art, potentially weakening trademark protections.

The Road Ahead: What’s Next for the BAYC Lawsuit?

The judges’ skepticism in the appellate hearing suggests an uphill battle for Ryder Ripps in his attempt to dismiss the lawsuit based on anti-SLAPP. While the court has not yet issued a formal ruling, the tone of the hearing indicates that the Ninth District may uphold the lower court’s decision that Ripps infringed on Yuga Labs’ trademarks.

Currently, the case is pending conclusion after a bench trial conducted by Judge John Walter to assess damages owed to Yuga Labs. The final verdict will not only determine the financial repercussions for Ripps and Cahen but also set potentially significant precedents for NFT-related trademark disputes and the boundaries of free speech in the digital art world.

Key Takeaways for the NFT and Crypto Space

This case offers several crucial insights for artists, creators, and legal professionals in the burgeoning NFT space:

• Trademark Law Applies to NFTs: Traditional trademark laws are being actively applied to the digital realm of NFTs. Creating and selling NFTs that closely resemble existing trademarks can lead to legal repercussions.
• “Protest Art” Defense Limitations: While artistic expression is valued, claiming “protest art” as a blanket defense against trademark infringement has limitations, especially when commercial activities are involved.
• Judicial Scrutiny of NFT Projects: Courts are increasingly scrutinizing NFT projects and applying established legal principles to this new technology. The novelty of NFTs doesn’t automatically grant immunity from existing laws.
• Importance of Legal Counsel: Navigating the legal landscape of NFTs requires expert legal counsel. Understanding trademark law, copyright, and free speech principles is crucial for creators and platforms in this space.

Conclusion: Awaiting the Verdict

The Ryder Ripps BAYC lawsuit remains a landmark case in the NFT world, testing the intersection of art, technology, and intellectual property law. The judges’ apparent skepticism towards Ripps’ anti-SLAPP motion signals a potentially tough legal outcome for the artist. As the case progresses towards its conclusion, the NFT community and legal observers alike are keenly awaiting the final verdict, which promises to have lasting implications for the future of digital art and trademark enforcement in the metaverse.