Fenwick Trademark Litigation Team Prevails in First-of-its-Kind NFT Case

Fenwick’s trademark litigation team obtained a significant final judgment on behalf of client Yuga Labs, the creator of the Bored Ape Yacht Club NFT collection, in the Yuga Labs v. Ripps matter. This has been a first-of-its-kind case involving knock-off NFTs and specious First Amendment defenses appealing to art/parody.

Leading up to this decision, the Fenwick team assisted the client in overcoming a motion to dismiss on First Amendment and fair use grounds, defeating counterclaims based on copyright and personal tort allegations, and winning summary judgment on liability and defendants’ affirmative defenses. We also prevailed on the defendants’ interlocutory appeal regarding their anti-SLAPP motion, with the Ninth Circuit summarily affirming the denial.

Over the course of almost half a year of hard-fought post-trial proceedings, our team has continued to rack up victories, including:

• A forceful and novel injunction that, among other things:
  • enjoins defendants and their associates from further infringement or misuse of the Bored Ape Yacht Club marks;
  • requires defendants to transfer websites, social media accounts, and the smart contract used to mint their infringing NFTs; and
  • requires defendants to transfer or burn the infringing NFTs still in their possession.
• Disgorgement of $1.38 million, representing all profits earned by the defendants from their infringement and related activities plus the maximum statutory damages of $200,000 for two instances of cybersquatting.
• A determination that this was an exceptional case under the Lanham Act, due to the strength of our litigating position, the unreasonable aggressiveness with which the defendants fought a losing case, obstructive conduct during proceedings and discovery, and the fact that defendants “unnecessarily and inappropriately made disgraceful and slanderous statements about Yuga, its founders, and its counsel during litigation.”
• An award of over $7.3 million in attorneys’ fees and other costs. The fee award was referred to a special master following the defendants’ refusal to negotiate reasonably. The special master found that the defendants’ approach to the fee award warranted a further award that they pay 100% of the special master’s fees.

Additionally, Judge Mahan of the District of Nevada denied a motion by defendants’ co-conspirator to vacate the default judgment against him. Judgment has now been entered against all members of the scheme.

This judgment represents an unequivocal victory in the litigation, a precedent-setting trademark ruling in web3, and a massive win for the client and other content creators on the frontiers of crypto and other emerging digital spaces in which intellectual property law is still being tested.

The Fenwick team included litigation partners Eric Ball, Molly Melcher and Todd Gregorian, litigation counsel Kimberly Culp, litigation associates Ethan Thomas, Tony Fares, Ryan Kwock, Mary Griffin Sims, Zack Kalinowski, Katie Hauh, and Sofiya Andreyeva.