The recent ruling from the United States Court of Appeals for the Ninth Circuit marks a turning point in the legal landscape of non-fungible tokens (NFTs) and trademark rights. On July 23, 2025, the court took a significant step by overturning a previous $9 million judgment in favor of Yuga Labs, the creator of the popular Bored Ape Yacht Club (BAYC). This decision not only challenges the NFT company’s previous triumph over artist Ryder Ripps and his partner Jeremy Cahen but also raises critical questions about how the law perceives consumer confusion in trademark cases.
As Yuga Labs celebrated its earlier victory—receiving over $8 million in damages after the district court found that Ripps and Cahen had infringed on its trademarks with their “Ryder Ripps Bored Ape Yacht Club” collection—a new chapter has begun. The Ninth Circuit’s ruling emphasized that the complexities of consumer confusion in trademark infringement and cybersquatting claims would require careful examination by a jury, rather than being settled through a simple summary judgment process.
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
This ruling carries significant weight in the realm of NFTs, clarifying that these digital assets are indeed protectable trademarks under federal law. The controversy erupted in 2022 when Ripps and Cahen launched their own collection featuring images almost identical to those of the original BAYC. Ripps claimed that his project was intended as a satirical criticism of what he perceived as the rise of “neo-Nazi symbolism and alt-right dog whistles” within the BAYC community.
Initially, the legal tide seemed to favor Yuga Labs, with the district court permanently banning the defendants from using any identifiers related to BAYC NFTs. However, the appeals court’s recent findings indicate a misapplication of trademark law in assessing consumer confusion, prompting a remand to the district court for further trial proceedings. This could lead to additional legal costs for both parties, as the fight continues, now deeper into the complexities of trademark law.
As the NFT market faces its own significant challenges—with trading volumes tumbling an astonishing 80% to just $823 million in Q2 2025, down from $4 billion the prior year—the implications of this ruling could reverberate beyond Yuga Labs. Major platforms have shut down operations, and the lending sector has seen a staggering 97% collapse in monthly volume. The NFT bubble that once soared above $50 billion in annual trading has now taken a painful nosedive, leading to further scrutiny and doubt regarding the future of digital collectibles.
🖼️ 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
The legal arguments around trademark infringement and consumer confusion are multifaceted, with the Ninth Circuit employing the “Sleekcraft” test, an eight-factor framework for assessing these issues. This evaluation revealed a mixed outcome, complicating the court’s ability to reach a clear decision. While factors like the strength of the BAYC marks and their prominent recognition worked in favor of Yuga Labs, several points supported the defendants, particularly concerning the unique branding of “RR/BAYC” and differences in their sales channels.
Interestingly, the appeal affirmed the idea that NFTs can be classified as “goods” under the Lanham Act, which opens new doors for digital asset trademark protection moving forward. The ruling delineated how BAYC NFTs serve more than just as digital badges; they function as tickets to exclusive online communities, merchandise, and high-profile events, solidifying their status within the commercial landscape of digital assets.
Though Yuga Labs has maintained its trademark priority as the first commercial user of the BAYC marks, the legal saga is far from over. The appeals court dismissed the defendants’ copyright-related counterclaims while upholding Yuga’s trademark protections. Meanwhile, Ripps even faced contempt allegations after allegedly destroying private keys related to the RR/BAYC tokens, a bold move that illustrates the lengths to which both parties are willing to go amid their ongoing dispute.
In a small win for Yuga, the Court affirmed the dismissal of defendants’ DMCA and DJ counterclaims. pic.twitter.com/02nu7EtEnH— Michael Eshaghian, Esq. (@LAIPAttorney) July 24, 2025
As we look to the horizon, it’s clear that the stakes remain high for both Yuga Labs and the broader NFT community. While the market faces downturns and uncertainty, establishing legal precedents concerning trademarks and consumer rights in the digital age is crucial. How this case unfolds could set significant benchmarks not just for NFTs but for the entire digital economy.
The ongoing legal battle signifies not only a struggle between two parties but also exemplifies the larger clash of ideals within the rapidly evolving world of digital assets. As we await the next phase in court, it raises an essential question: What does the future hold for the intersection of art, commerce, and the law in the cryptocurrency landscape?