The market for non-fungible tokens has cooled from its peak, yet digital goods remain a significant commercial asset. This summer, the Ninth Circuit Court of Appeals ruled that NFTs qualify as “goods” under the Lanham Act, subjecting them to trademark law. The decision in Yuga Labs v. Ripps marks a pivotal moment for digital assets, clarifying that intangible items can be protected if they function as commercial products.
The case centered on a dispute over the Bored Ape Yacht Club (BAYC) NFT collection. Yuga Labs accused artist Ryder Ripps of creating a nearly identical NFT line using the same branding and imagery. The defendants argued that NFTs, being digital and intangible, do not meet the definition of “goods” under trademark law. The court rejected this argument, reversing a summary judgment on trademark infringement. While unresolved questions about consumer confusion remain, the ruling confirmed that NFTs are eligible for trademark protection.
The court’s reasoning extended beyond NFTs as a niche category. It emphasized that the Lanham Act safeguards marks used with “any goods or services,” regardless of their physical form. The court referenced U.S. Patent and Trademark Office guidance, noting that NFTs are traded in curated online marketplaces, functioning as commercial goods. This expands trademark protection to a wide range of digital assets, including virtual fashion, in-game items, tokenized memberships, and digitally branded merchandise.
A critical distinction was drawn between NFTs and earlier cases involving intangible content embedded in physical goods, such as video cassettes or karaoke tracks. In those cases, the intangible elements were deemed expressive ideas or creative works, not protectable under trademark law. NFTs, however, exist and are traded entirely in digital environments. Their intangible nature includes the distribution platform itself, making them distinct from physical media.
The ruling underscores that courts are willing to adapt traditional intellectual property frameworks to emerging technologies. The court cited a recent Supreme Court case, noting that legal rules should not “embarrass the future” when applied to new challenges. For businesses, the decision serves as a reminder to proactively address trademark risks in the digital space.
Companies should audit their digital offerings for trademarkable elements, such as logos, names, and symbols. Reviewing existing trademark portfolios is essential to ensure digital assets are adequately protected. Additionally, monitoring marketplaces for unauthorized use of marks in NFTs or other digital assets is critical to maintaining brand integrity.
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The case highlights the evolving intersection of law and technology, reinforcing that digital goods are not exempt from traditional legal protections. As the digital economy grows, businesses must navigate these complexities with vigilance and foresight. Protecting intellectual property in this new landscape requires more than just legal compliance - it demands proactive defense.