LOS ANGELES (CN) — The creator of the Bored Ape Yacht Club non-fungible tokens asked a judge for an injunction to halt the makers of self-described protest knockoff NFTs after more than two dozen takedown notices have failed to stop their use of Yuga Labs' trademarks.
Attorneys of Yuga Labs, which launched the Bored Ape Yacht Club collection two years ago, and the two defendants, Jeremy Cahen and Ryder Ripps, squared off Monday morning in a packed courtroom in downtown LA for a short bench trial to decide the appropriate amount of damages and the scope of an injunction after the judge already ruled in April that the defendants were liable for false designation of origin and for cybersquatting.
Yuga Labs is asking for a relatively modest $1.6 million in disgorgement of the defendants' profits from their infringing project as well as $200,000 in statutory damages. Probably more important for the company will be an injunction that prevents the two defendants from creating and selling additional Bored Ape knockoffs and that gives Yuga Labs control of the infringing websites and Twitter accounts, as well as the "smart contract" under which the infringing NFTs were minted.
"They continue to drum up interest in their scam," Yuga Labs co-founder Greg Solano testified. "Like with any luxury brand, fakes harm the market."
The Bored Ape collection is one of the most successful NFTs collections and has been endorsed by a slue of celebrities, including Justin Bieber, Paris Hilton, Madonna and Jimmy Fallon. Non-fungible tokens shot to popularity on the back of cryptocurrencies by using a similar blockchain technology to create a unique digital file for an image that can be held as an investment or sold on secondary marketplaces.
Yuga Labs sold the entire 10,000 images of the Bored Ape Yacht Club on the first day they became available, and the NFTs have been resold for hundreds of thousands — and sometimes millions — of dollars.
The success of the collection also drew criticism, including by Cahen and Ripps, who claim that the images include racist, neo-Nazi and alt-right dog whistles.
"This whole process began as a protest against racism, anti-semitism and financial fraud," Cahen testified. "We didn't intent to confuse anyone."
The "protest" or "satire" defense may only go so far with U.S. District Judge John Walter, a George W. Bush appointee, who took the matter under submission without issuing a ruling at the end of Monday's hearing. During the testimony of one of Cahen and Ripps' collaborators, who insisted he had joined the project to protest the racist ape imagery, the judge expressed some reservation about protesting racism by using the exact same images.
Two Bored Apes images that gave rise to these concerns were shown at trial. One was of a sushi chef Bored Ape who is wearing a kamikaze headband and another, a grinning, hip hop Bored Ape with a gold "grill" for teeth. Another issue for the defendants is Yuga Labs' monkey skull logo for the Bored Apes Yacht Club collection, which they suggest resembles the skull used on the uniforms of the Nazi SS during World War II.
Although knockoff Bored Apes NFTs aren't unheard of in general, the collection created by Cahen and Ripps caused much commotion as it was featured in news reports as part of the Yuga Labs project, prompting confusing among investors, journalists and the general public, according to Solano's testimony.
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