The Ninth Circuit Court of Appeals has determined that non-fungible tokens (NFTs) qualify as protected ‘goods’ under U.S. trademark law, establishing a foundational precedent for digital asset intellectual property disputes. This landmark recognition emerged during the appeal of Yuga Labs’ trademark infringement case against artist Ryder Ripps over his ‘RR/BAYC’ NFT collection.
However, the appellate court overturned the previously awarded $9 million damages against Ripps. Judges cited insufficient evidence demonstrating consumer confusion or actual harm to Yuga Labs stemming from Ripps’ NFT series, which parodied the iconic Bored Ape Yacht Club assets. The case is remanded to district court for a new trial to evaluate whether Ripps’ actions constituted trademark infringement or qualified as non-commercial fair use.
The ruling clarifies that trademark protections extend explicitly to NFTs while distinguishing between commercial exploitation and expressive, artistic applications of blockchain-based assets. This nuanced approach aims to balance trademark enforcement in Web3 with artistic innovation, potentially influencing dozens of pending legal disputes involving NFTs and intellectual property rights.