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A U.S. District Judge in California, John Walter, decreed that Yuga Labs, renowned for its Bored Ape Yacht Club NFTs, will be awarded almost $1.6 million in damages, along with legal costs. This comes after conceptual artist Ryder Ripps and his associate Jeremy Cahen replicated Yuga Labs’ NFT artworks, framing it as an artistic critique of alleged racism in Yuga’s pieces.

This decision succeeds a prior verdict from the United States District Court for the Central District of California, where it was ruled that Ripps and Cahen had indeed violated Yuga Labs’ trademarks through their NFT collection earlier this year.

Subsequent to this verdict, a trial was established to evaluate the exact compensation Yuga Labs would receive.

During this trial, Judge Walter declared that all profits amassed from the copied NFTs should be handed to Yuga Labs. Dismissing their defense, he ruled that the duo had deliberately capitalized on Yuga’s popularity.

Federal judge John Walter commented, “Defendants were not creating a parody or satire. Instead, they were intentionally using the BAYC marks in an effort to profit off of Yuga’s success.”

Additionally, the judge awarded Yuga Labs legal fees and an added $200,000 for cybersquatting. Ripps and Cahen were also instructed to halt all sales of the duplicate NFTs and to transfer the associated digital and social assets to Yuga Labs.

Despite Ripps and Cahen’s claim that their actions were a form of artistic critique, they have been alleged to make a fortune from duplicating Bored Ape tokens. The case remains under review by the 9th U.S. Circuit Court of Appeals, referencing a Californian law safeguarding free expression.

Louis Tompros, the lawyer representing Ripps and Cahen, expressed disagreement with certain elements of the judgment, hinting at a potential appeal.

Conversely, a Yuga Labs representative praised the decision, viewing it as a step forward in promoting genuine web3 experiences worldwide.

In an earlier hearing this month, the attorney for Ripps and Cahen found it challenging to persuade a trio of judges to discard the lawsuit raised by the Bored Ape Yacht Club.

Judges from the United States Court of Appeals for the Ninth District appeared dubious about the defenses put forth, particularly focusing on the resale of the imitation NFTs. The lawyer argued for the dismissal based on free speech, suggesting that the copied NFTs were a form of protest against supposed covert anti-Semitic symbols in the primary collection.

However, Circuit Judge Morgan Christen expressed reservations, stating, “I’m still not seeing it,” hinting at a need for a more transparent foundational argument to validate the lawsuit’s merits.

This entire legal confrontation was initiated in June 2022 when Yuga Labs charged Ripps and Cahen with accumulating significant gains via trademark violations, deceptive advertising, and cybersquatting, among other allegations.