The legal skirmish surrounding the Bored Ape Yacht Club (BAYC) took a significant turn recently, as the United States Court of Appeals for the Ninth Circuit largely overturned a controversial $9 million ruling that favored Yuga Labs, the brains behind the famed NFT collection. This decision not only casts a shadow over Yuga Labs’ trademark triumph over Ryder Ripps and his partner Jeremy Cahen but also sheds light on the intricate dynamics of intellectual property in the rapidly evolving world of digital assets.
On July 23, 2025, the appeals court concluded that critical aspects regarding consumer confusion related to trademark infringement and cybersquatting should be the responsibility of a jury rather than being summed up in a hastily reached summary judgment. This revelation is pivotal not only for Yuga Labs but for the entire NFT community, reinforcing the necessity of trademark protections as digital art continues to merge with mainstream cultural identity.
We just heard back from the Ninth Circuit Court of Appeals on the RR BAYC case. The Ninth Circuit confirmed: BAYC NFTs are protectable trademarks, which is an important win for every NFT holder.We’ll now finish the fight in the district court, where the judge already fined…— Garga.eth (Greg Solano) (@CryptoGarga) July 23, 2025
In a striking twist, while the decision confirmed that NFTs can be registered as trademarks under federal laws, it ultimately reversed earlier findings from the district court. The ruling sends the case back to the lower courts, opening the door to potentially protracted litigation and further legal expenses for both parties. The saga kicked off in May 2022 when Ripps and Cahen launched their version of BAYC, cheekily named “Ryder Ripps Bored Ape Yacht Club,” which utilized strikingly similar cartoon imagery to that of the original collection. Ripps claimed that his project served as a satirical critique of purported “neo-Nazi symbolism, alt-right dog whistles, and racist imagery” within the original NFTs.
Initially, the district court sided with Yuga Labs, awarding them over $8 million in damages along with legal fees, after it found sufficient grounds for trademark infringement and cybersquatting violations. The court also placed a permanent ban on the defendants from using any BAYC-related identifiers and mandated the transfer of all infringing materials. However, the appeals panel concluded that the lower court mishandled the application of trademark law regarding consumer confusion, thereby necessitating a jury trial to resolve these crucial questions.
➔ Why This Matters: This case isn’t just about two groups battling it out in a courtroom; it’s about the future landscape of intellectual property in the realm of digital collectibles. As the NFT market grapples with a staggering 80% decline in trading volume amidst economic uncertainty, this ruling serves as a significant touchstone for how NFTs can be legally recognized and protected.
As the legal drama unfolds, the broader NFT market navigates its stormy seas, witnessing trading volumes plummet from a whopping $4 billion the previous year to just $823 million in Q2 2025. Major NFT platforms have come crashing down, leading to a staggering 97% decline in lending markets that once thrived. The landscape has suddenly become inhospitable for many investors and creators alike.
🖼️ NFT trading falls fifth consecutive quarter down massive 80% to $823M as major platforms exit market and lending sector collapses 97% to $50M monthly volume.#NFT #NFTTradinghttps://t.co/fat3I4TA4a— Cryptonews.com (@cryptonews) July 8, 2025
🔍 Expert Opinions: Legal experts note that the Ninth Circuit’s application of the “Sleekcraft” test—a comprehensive eight-factor analysis to determine consumer confusion—spotlights the complexity of the situation. While certain aspects leaned in favor of Yuga Labs, such as the strong market recognition of BAYC, other factors played into the defendants’ hands. Notably, the addition of “RR/” to their collection name and the choice to operate primarily through their website suggested that savvy consumers would be able to differentiate between the original and the derivative products.
Interestingly, the court acknowledged that individuals purchasing NFTs are often “inherently sophisticated” consumers, typically accustomed to navigating the complexities and high stakes of the digital collectible marketplace. Other notable points of contention included the defendants’ motivations behind their work, which combined both satirical and commercial intents. Ripps’ artistic claims drew attention to a nuanced debate over trademark infringements that complicates clear lines between artistic expression and commercial exploitation.
🚀 Future Outlook: Looking forward, the implications of this ruling stretch far beyond the confines of this case. By affirming that NFTs qualify as “goods” under the Lanham Act, the Appeals Court has established important legal precedent for future digital asset trademark protections. As BAYC NFTs operate beyond mere ownership certificates, serving instead as gateways to exclusive online communities and celebrity events, delineating clear guidelines for trademark usage will become increasingly pressing.
Yet, while Yuga Labs retains trademark priority as the original commercial user of the BAYC marks, this legal struggle appears far from over. The case has spanned three years, marked by disputes over copyright claims and the defendants’ challenging actions—including a previous attempt by Ripps to undermine court orders by destroying wallet keys tied to RR/BAYC tokens. Both parties have indicated plans for continued litigation, suggesting that the legal fight may extend well into the future, even as the NFT market grapples with its downward trajectory, which saw trading volumes exceed $50 billion annually back in 2022.
In conclusion, the battle between Yuga Labs and Ryder Ripps may not just define the destinies of the parties involved, but could forge a path for the broader NFT industry and its intricate relationship with trademark law. As the dust settles from this latest ruling, all eyes will be on how the lower court navigates the complexities of this case. For NFT enthusiasts and investors, staying informed will be crucial as the landscape evolves. Will the next chapter bring further clarity, or will the legal fog deepen? Only time will tell.