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Yuga Labs to Receive $9 Million in Settlement Over “Fake” BAYC NFTs | by Sherri | Feb, 2024

In a landmark ruling that underscores the value of intellectual property in the digital art space, U.S. District Judge John F. Walter has ordered artist Ryder Ripps and Not Larva Labs founder Jeremy Kaehen to pay Yuga Labs, the creator of the Bored Ape Yacht Club (BAYC), a hefty sum of $8.9 million. This decision comes in light of a lawsuit filed by Yuga Labs against the defendants for creating and selling “fake” NFTs that allegedly devalued the original BAYC tokens.

The case, which began in June 2022, highlights the ongoing battle against counterfeit digital assets and their impact on creators and the market at large. According to court documents, Ripps flooded the market with imitations by using BAYC’s original images and branding them as RR/BAYC, directly infringing on Yuga Labs’ trademark rights.

In February 2023, the court had already found in favor of Yuga Labs against Thomas Lemann, who had created websites and smart contracts for the RR/BAYC, acknowledging the infringement of trademark rights. This initial ruling set the stage for the recent verdict, which includes around $1.575 million in damages awarded in October, with an additional $7 million for legal services and other expenses.

This case serves as a cautionary tale for the NFT community about the importance of respecting intellectual property rights. The hefty sum awarded to Yuga Labs not only compensates for the alleged devaluation of their original works but also sends a strong message against the unauthorized use of copyrighted material in the creation and sale of NFTs.

Interestingly, this legal victory coincides with Yuga Labs’ announcement of a company restructuring and layoffs in October, with a strategic focus on developing the Otherside metaverse, launched in spring 2022. The outcome of this lawsuit might offer a financial cushion that could support the studio’s ambitious projects in the evolving digital landscape.

This ruling is a significant moment for the NFT industry, emphasizing the legal responsibilities of creators and sellers in the market. It also highlights the potential legal repercussions for those who attempt to profit from the intellectual property of others without authorization. As the digital art and NFT spaces continue to grow, this case could set a precedent for future disputes over digital property rights, ensuring that original creators are protected under the law.

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