Bored Ape's Yuga Labs Sues Man Who Made Millions Selling "Fake" BAYC NFTs

his might be a defining case for the NFT market.

In an interesting turn of events, it seems Yuga Labs has decided to sue Ryder Ripps. Ripps is a long-time critic of the Yuga Labs, and the Bored Ape Yacht Club (BAYC) known for some of the world's most popular NFT collections. Ripps has long criticized the founders as Nazis and scam artists, but recently decided to take it a step further. The artist made a complete copy-cat collection of Bored Apes then proceeded to sell them. Normally, a knock-off NFT collection wouldn’t garner much attention, as it’s not that hard to do.

However, this one was particularly unique because it completely sold out. In fact, the “fake” collection had sales volume than the ACTUAL Bored Ape collection at one point. As one would expect, Yuga Labs didn’t take too kindly to this and has since sued the artist for trademark infringement and a host of other claims.

While it’s important to note that the lawsuit here is around Ryder using very similar materials to market these NFTs (such as a similar logo as BAYC and Ryders rr/BAYC), this could end up answer an incredibly long-standing question about a company's intellectual property rights in an NFT collection. It’s unclear if BAYC has any intellectual property rights in any of their collections because the NFTs are AI-generated images. As well, there are issues around supposed “decentralization” and a host of other issues here.

While it’s unclear whether or not there are any rights in Yuga Labs NFT collections, it doesn’t look too good for Ripps. This is because Ripps went to extensive lengths to create this parody collection of Bored Apes, including a similar logo:

As well as a fake website, exact copy of the original NFT collection, another Twitter account, and more. This is also different than most because his stated intention isn’t to scam people based on selling knock-offs but rather to “expose” Yuga Labs and make parody works under his actual name. However, many of Ryders points are valid, as the company has been selling, essentially, unregistered, highly speculative securities for a number of months to unsuspecting buyers.

Another issue that might not seem readily apparent is the fact that, technically, Ryder didn’t make any money off this because all the NFTs were sold in exchange for Ethereum. I don’t see this staying in the way of anything significant, but if Ryder is found liable, there could be an interesting question as to damages.