- On Jan. 17, 2023, Magistrate Judge John F. McDermott gave Yuga Labs a major victory in discovery. The Court rejected Ryder Ripps and Jeremy Cahen’s motion to compel Yuga Labs to respond to their discovery request “to Yuga’s [alleged] use of racist neo-Nazi messages and imagery.”
- The Court ruled:
- “The Court agrees with Yuga that the above discovery requests are moot, irrelevant and not proportionate to the needs of the case in view of the District Court’s December 16, 2022 ruling. (Dkt. 62.) Defendants say that discovery related to Yuga’ pretext theory should be permitted but the above discovery requests do not seek documents or answers relevant to pretext. They seek information about Inflammatory Material which is now moot in view of the District Court’s December 16, 2022 ruling.”
- On Dec. 16, Judge John F. Walter had rejected Ripps’ ant-SLAPP motion and motion to dismiss Yuga’s trademark infringement claim against Ripps and Cahen, who allegedly reminted “RR/BAYC” NFTs pointing to the same images of Bored Apes as Yuga Labs’ NFTs. Judge Walter ruled:
- “In this case, the Court concludes that the Rogers test does not apply. The Ninth Circuit only applies the Rogers test when “artistic expression is at issue,” and require defendants to make a “threshold legal showing that its allegedly infringing use is part of an expressive work protected by the First Amendment.” Gordon, 909 F.3d at 264; see also Rogers, 875 F.2d at 999. Although Defendants’ argue that the larger RR/BAYC “project” is an expressive artistic work protected by the First Amendment, Defendants’ sale of what is admittedly a “collection of NFTs that point to the same online digital images as the BAYC collection” (Motion, 6:20-21) is the only conduct at issue in this action and does not constitute an expressive artistic work protected by the First Amendment. In particular, the RR/BAYC NFTs do not express an idea or point of view, but, instead, merely “point to the same online digital images associated with the BAYC collection.”
- Although only a ruling on discovery, Judge McDermott’s order is quite significant. It may affect the scope of questions in the upcoming depositions of Wylie Aronow and Greg Solano, the two co-founders of Yuga Labs. Judge McDermott ruled on Jan. 9 that Ripps can depose the two co-founders. But it’s unclear how the Jan. 17 order affects the scope of deposition, if at all. The Judge mentioned: “The issue of whether Defendants can introduce the Inflammatory Material by the backdoor of a counterclaim is a merits issue within the province of the District Court.”
- Judge McDermott also rejected the motion to compel Yuga Labs to reveal the name of the third party designer who helped to create the trademark designs of Yuga Labs: “The District Court’s December 16, 2022 Order, moreover, renders moot discovery regarding Inflammatory Material, as discussed above. The origin of the marks only has relevance to the Inflammatory Material.”
- COI disclosure: I own Yuga Labs NFTs (Mutant Ape and Otherdeed).
