Yuga Labs at Center of Battle Over the Nature of NFT Copyright

Yuga Labs at Center of Battle Over the Nature of NFT Copyright

Yuga Labs, creators of the NFT Bored Ape Yacht Club (BAYC) collection at the center of a trademark dispute, has been served with a counterclaim, according to court documents filed Monday. Artist Ryder Ripps and his business partner Jeremy Cahen, known on Twitter as Pauly0x, asked the court to determine that the BAYC images cannot be copyrighted because they were, according to their recently filed lawsuit, “generated by an automated computer algorithm with no human involvement to choose which of the 10,000 BAYC images were selected.” The relationship between NFTs and intellectual property (IP) is an ongoing debate. The new counterclaim comes amid Yuga Lab’s continuous trademark infringement lawsuit filed in June against Ripps and Cahen, founders of the RR/BAYC NFT project.

While Yuga Labs claimed that Ripps and Cahen sold copies of NFTs to misleading consumers, the defendants contended that NFTs, by definition, are “unique in design and cannot be copied. Additionally, they argue that Yuga does not own any copyright in images associated with BAYC NFTs based on the project terms, which state that BAYC NFT owners retain all intellectual property rights to their NFTs, “the underlying Bored Ape, the art, in its entirety” Yuga Labs previously scored a minor legal victory on December 16 when the Federal District Court of Central California denied the defendant’s motion to dismiss the case.

In August, Rippers’ attorneys filed an anti-SLAPP (Strategic Lawsuit Against Public Participation) motion against Yuga Labs to drop the lawsuit. The RR/BAYC project is viewed as an expressive work of art that the First Amendment must protect,” the defendants alleged.

However, the court ruled that the anti-SLAPP motion was unenforceable because “RR/BAYC NFTs do not express an idea or view” and instead “target the same online digital images associated with the BAYC Collection. A Labs spokesperson emailed Blockworks at the time that the defendant’s arguments amounted to “egregious lies” that were “unrelated to the case.” With the possibility of going to court, given the market value of the property in question, his developments will likely set a precedent for the larger NFT ecosystem of all time, with 703,000 ETH behind CryptoPunks with a 1 million ETH turnover.

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