In court documents, Yuga Labs, the parent company of the successful NFT collection Bored Ape Yacht Club, has admitted that the 10,000 images that constitute the BAYC collection have no copyright.
“Yuga Labs does not possess a copyright in the Bored Ape images,” a court document submitted by Yuga Labs’s lawyers reads.
These court documents were submitted as part of the ongoing lawsuit that Yuga Labs has lobbed against artist Ryder Ripps, who appropriated images from the BAYC collection for his own NFT collection, titled RR/BAYC, that he made as a protest piece that hoped to both bring attention to his belief that the BAYC NFTs are threaded with alt-right, neo-Nazi symbolism, and challenge the belief that large PFP collections were protected by copyright.
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During the NFT boom, the creators of Yuga Labs were the first to offer a novel perk: by owning an NFT, they claimed that copyright interest were also handed over, meaning if one owned a BAYC NFT, one could make anything from t-shirts to TV shows using the image of the Bored Ape that that person owned.
Granting IP rights to holders of BAYC NFTs was key in pumping up the value of the collection (at one point, Yuga Labs was valued at $4 billion), but it turns out that there was no copyright to grant. Currently, Yuga Labs terms of service have been modified so that it no longer suggests that copyright is granted alongside ownership, but there is copious evidence that Yuga Labs once advertised copyright as a benefit of collecting their NFTs.
When comedian Seth Green had his Bored Ape stolen from him, it was a huge loss because he had been developing a TV show which starred his NFT.
“I bought that ape in July 2021, and have spent the last several months developing and exploiting the IP to make it into the star of this show,” Green told Gary Vaynerchuck during a Vee-Con panel. “Days before he’s set to make his world debut, he’s literally kidnapped.”
Legal outlets, alongside mainstream entertainment and news publications, followed the copyright perk with interest, especially after Green’s Ape was stolen, calling into question if the IP rights to the Ape had transferred to the thief.
Even though Yuga Labs has changed their terms of service, having once advertised copyright perks and now admitting that those perks were never available could land them in more legal trouble.
“If there was some language in the terms of service or if copyright was advertised when offering the NFTs for sale, that could be that could be a real problem for Yuga Labs,” said Erica Van Loon, partner and IP trial lawyer with Nixon Peabody. “There’s a number of claims that could be brought against them from people who bought their NFTs, such as false advertising and unfair competition.”
Seeing as the consequences of admitting to this could be so severe, it’s odd that Yuga Labs has admitted so plainly to there not being any copyright for these images, but Ripps backed them into a corner. He filed a counterclaim asking for a declaration from the court that Yuga Labs didn’t have any copyrights, which he believed to be relevant to his defense strategy. Yuga Labs then filed a motion to dismiss this counterclaim.
“Their argument to the court was ‘We brought an action for trademark infringement, not for copyright infringement, so it is not right for the court to reach out and determine whether or not we have copyright rights or not,’” explained Van Loon.
By admitting to not having copyright at the moment, Yuga Labs dodged the courts making a decision that large NFTs collections cannot be copyrighted at all, something that has still not been figured out legally.
“Yuga Labs lifted their Terms of Service from Suum Cuique labs, used a trendy (in 2021 NFT scam world) lie when they launched, tried to convince people that the value of NFT was being able to own Copyright, computer generated content is not allegeable for copyright,” wrote Ripps in an emailed statement, referencing Suum Cuique labs, another NFT parent company whose name may be derived from a Nazi phrase that translates “to each his own”.
“The ape images are all too similar as well, which creates an additional problem for attempting to issue 10,000 copyrights to extremely similar images (some of which are identical apes),” he added.