Yuga Labs, Inc. v. Ripps, 2:22-cv-04355, (C.D. Cal.) (June 24, 2022)

In a recent update to the ongoing litigation, Yuga Labs filed a motion for partial summary judgment on its claim for false designation of origin. Defendants argued that NFTs are intangible and thus not eligible for trademark protection, but the court ruled against them, stating that trademark law does not require goods to be tangible for Lanham Act liability. Defendants also argued that Yuga had transferred all trademark rights to the holders of the Bored Ape Yacht Club (BAYC)  NFTs and could not assert claims now; however, the court noted that BAYC provided holders a copyright license but not a trademark license. Defendants also tried to avoid trademark liability by invoking an “unclean hands” defense, but the court held that the misconduct alleged had no connection to the trademark dispute. This ruling is not the final word on this litigation. First, the district court has held that Yuga is entitled to monetary damages and injunctive relief, but the amount of damages has not yet been determined.  Second, the defendants are appealing several aspects of the ruling, so the Ninth Circuit Court of Appeals will be taking another look at many of the issues raised here. The decision asserts that NFTs are protectable under trademark law and highlights the continued skepticism of courts towards “appropriation art” when it comes up against another creator’s intellectual property. The case is part of an ongoing conversation about how creations that borrow significantly from preexisting content should be handled under intellectual property law. See the filings HERE.

DOE 1 et al v. GitHub, Inc. et al, No. 3:22-cv-06823 (N.D. Cal.) (Nov. 3, 2022)

A recent court order from US District Judge Jon Tigar in Northern California regarding the legal challenge against GitHub Copilot and its underlying OpenAI Codex model suggests a temporary relief for GitHub, parent company Microsoft, and OpenAI. However, the order refused to dismiss two claims in the case and has sent most of the other allegations back for revision, leaving the most significant aspects of the case intact and allowing other claims to be better supported in a revised complaint. The initial complaint alleged that GitHub, Microsoft, and OpenAI violated various laws by using public source code from GitHub to develop OpenAI’s Codex machine learning model and GitHub’s Copilot programming assistant. The judge rejected the defendant’s motion to dismiss the plaintiffs’ claim, which allegesCodex’s ability to reproduce code constitutes a breach of software licensing terms, as well as a violation of Section 1202(b) of the Digital Millennium Copyright Act, as Copilot and Codex reproduce copyrighted code without the required copyright management information. Litigation based on these allegations can be expected to continue. However, the judge dismissed other aspects of the complaint, including civil conspiracy allegations and the demand for declaratory relief, as well as various claims made by the defendants, as the judge asserted that such claims lacked  the necessary detail to proceed. The judge found the plaintiffs’ assertion that Codex and Copilot violate their property rights to be plausible, assuming the facts of the complaint are true. Nonetheless, the defendant companies argued that the claim should be dismissed, since the plaintiffs did not identify specific code of theirs that had been reproduced. Read the order HERE.

Prater v. Trustees of the Hamline University of Minnesota, No. 23-cv-505 (KMM-DJF) (D.Minn. Mar. 2, 2023). 

Erika López Prater, formerly a professor at Hamline University in Minnesota, filed a lawsuit against Hamline after López Prater was fired due to an incident in her art history course. In October 2022, López Prater taught her world art history course online, which included two paintings depicting the Prophet Muhammad as examples of artwork used as devotionals by practicing Muslims in the 14th century. Aware that some students may be offended by showing the depictions of the Prophet, López Prater warned students before moving to the slides with those paintings, and gave students an opportunity to step out of the online classroom. However, one student nevertheless reported López Prater for showing the images, and López Prater  subsequently was fired by the university, which stated that, “respect for the observant Muslim students in that classroom should have superseded academic freedom.” López Prater initially filed suit in state court in January 2023, but the lawsuit was subsequently removed to federal district court on March 2, 2023. López Prater is claiming religious discrimination, defamation, retaliation, and intentional infliction of emotional distress against Hamline. However, Hamline has filed a motion to dismiss. Read the Motion to Dismiss HERE and López Prater’s response to the motion HERE.

CE Sect., April 14, 2023, ECLI:FR:CEORD:2023:472611.20230414.

Six associations led by the Association Juristes Pour L’Enfance [lawyers for childhood], filed a plea for interim relief to have Miriam Cahn’s painting “fuck abstraction!”, which depicts sexual war crimes committed in Bucha, Ukraine, removed from its exhibit in the Palais de Tokyo in Paris and to have the museum penalized for every day the painting was left hanging. These organizations claimed that the painting grossly violated the “best interests of the child” by purportedly “representing a raped child forced to perform fellatio on an adult man.” Cahn had stated in her artist statement that the small stature of the victim was merely meant to highlight “the corporeal power of the oppressor, and the fragility of the oppressed.” When the applications judge of the Parisian administrative court initially dismissed the application, the organizations appealed to the State Court of France, the highest administrative court in the country. However, this appeal was rejected, on April 14, because the summary judge found that the Palais de Tokyo had installed sufficient protective measures to prevent unaccompanied minors from viewing the painting, and that it was clear from information provided next to the painting by the artist that the painting was meant to denounce war crimes committed in the Russo-Ukrainian war by the Russians, not to depict a child being raped. Download the written verdict HERE (French).

Candace Barasch et. al., v. Lisa Schiff, Schiff Fine Art LLC, SFA Advisory LLC, et. al., Index No. 652287/2023 (N.Y May 11, 2023)

 Lisa Schiff, a prominent art adviser based in New York, is facing a lawsuit filed by collector Candace Carmel Barasch and Richard Grossman in New York’s Supreme Court. The lawsuit alleges that Schiff and her advisory firm sought to defraud the collectors by refusing to pay fees owed as a result of the sale of Adrian Ghenie’s painting, The Uncle 3 (2019), which sold for $2.5 million at Sotheby’s Hong Kong. The suit claims that Schiff and her firm were involved in a Ponzi scheme that involved taking money from one client to pay another and to fund Schiff’s lavish lifestyle. Schiff, who runs SFA Advisory, reportedly rents a New York apartment for $25,000 per month and indulges in international first-class travel. The collectors are seeking more than $2 million in damages and for Schiff to forfeit her $250,000 commission on the Ghenie sale. Read the lawsuit HERE.

United States v. Chastain, 22-CR-305 (JMF), (S.D.N.Y. May. 2, 2023)

On May 3, an employee at NFT marketplace OpenSea, Nathaniel Chastain, was convicted of fraud and money laundering for using insider trade knowledge. Chastain, a product manager no longer employed with the company, purchased NFTs he knew would then be featured on OpenSea’s homepage, and then after, sold them at a $50,000 profit. The case represents the first insider trading case involving digital assets, according to federal prosecutors in Manhattan. The case represents the application of “insider trading,” which historically has applied primarily to securities, to the trade of more non-traditional, non-securities assets such as NFTs. With NFTs as the assets in question, Chastain has been convicted of using confidential, non-public, “inside” information about an asset to buy and then sell that asset on a public market. His sentencing for wire fraud and money laundering will be decided by August 22. You may view the order HERE, and the letter to the jury HERE.

Donnelly et al v. Anand et al., No. 1:2021cv09562 (S.D.N.Y. Nov. 18, 2021) 

The U.S. District Court in NY awarded KAWS, otherwise known as Brian Donnelly,  just under $1 million  in damages against several companies he worked with in Singapore who were found  guilty of reproducing knockoffs of KAWS works. Dylan Joy An Leong Yi Zhi and two associated companies in Singapore, Penthouse Theory and the Penthouse Collective, replicated KAWS’ “Companion” figure, as well as many other works including art, toys and skateboards, ultimately reproducing 154 variations of KAWS creations. The Singaporian companies have made over $63 million USD from selling KAWS items. Since 2020, KAWS and his legal team have been sending takedown notices and cease-and-desist letters. In November 2021, they filed a complaint against Leong and his associated companies, and on May 2, 2023, the U.S. Court in the Southern District of New York ruled that Leong must pay KAWS $900,000 in damages. The case represents an important international precedent for enforcing copyright protections globally. Singapore, under a common law system, recognizes U.S. court decisions, and enforces them.  You can view the filing for the case HERE.