A Bored Ape Can Be a Trademark
9th Circuit Weighs in on NFT and Trademark Law
Nonfungible tokens (NFTs) can function as trademarks, as decided in a key ruling by the Ninth Circuit in Yuga Labs Inc. v. Ryder Ripps et al. (July 23, 2025). The case also addresses fair use and expressive speech.
Yuga Labs (Yuga) created the Bored Ape Yacht Club (BAYC) NFT collection and began selling its NFTs in April 2021. One of the first NFT collections to capture wide public attention, each NFT offered as part of the BAYC collection is a unique digital character in the form of a “bored ape,” as shown in the examples below.
Purchase of one of the BAYC NFTs includes ownership of the digital asset, the artwork and also provides the owner with access to an exclusive social community, associated merchandise and events featuring prominent musical artists. Yuga’s offerings were successful and sold at an average price of $200 each.
In May 2022, conceptual artist Ryder Ripps and his business partner Jeremy Cahen launched the “Ryder Ripps Bored Ape Yacht Club” (RR) NFT collection, which incorporated nearly identical copies of the BAYC collection digital characters. Ripps was critical of the imagery within the BAYC collection and positioned the RR NFTs as exposing and commenting on that imagery.
Suit was filed by Yuga claiming trademark infringement and unlawful cybersquatting. Defendants alleged DMCA protection and a declaration that Yuga had no copyright protection over the BAYC NFTs. The district court granted judgment in favor of Yuga on its claims, dismissed the defendants’ counterclaims and awarded Yuga over $8 million in damages. Defendants appealed to the Ninth Circuit.
The Ninth Circuit first declared unequivocally that NFTs qualify as “goods” under the Lanham Act, finding that consumers experience NFTs as commercial products with tangible value. The court rejected defendants’ assertions that Yuga lost its rights through selling the BAYC NFTs and that unregistered securities violations affected Yuga’s ability to enforce its trademarks as well as defendants’ First Amendment and fair use defenses. Nonetheless, the court reversed the lower court’s holdings of trademark infringement and cybersquatting because Yuga did not prove as a matter of law that defendants’ actions were likely to cause consumer confusion.
The key factors to consider when assessing NFT rights and potential enforcement include the following:
· NFTs are goods under U.S. trademark law
· Likelihood of confusion must be proven, and this presents challenges whether the good is a truck part or an NFT
· A fair use or protected speech defense is not necessarily viable against claims of infringement just because a seller, in conjunction with selling its own competing goods, aims to criticize or provide commentary about a competitor’s goods
If you provide NFTs, we recommend reaching out to an experienced intellectual property lawyer for advice about how best to protect and enforce those assets. The intellectual property attorneys of Parsons Behle & Latimer would be happy to assist you with any questions you may have.
