A nonfungible token or NFT is an intangible, fully virtual, authenticating software code that is associated with separate digital or physical content. Associating an NFT with otherwise fungible digital content, known as “tokenizing,” transforms that content into a unique asset. The process by which NFT creators tokenize content is called “minting.” And when an NFT is minted, it is stored on a “blockchain.” Blockchains allow the ownership of the NFT to be transferred and authenticated electronically without the need for a physical item or a trusted third party such as a bank. 

This has been described as a way to create artificial scarcity in the digital art market. And a resulting speculative bubble for NFTs burst in 2022 when the NFT market fell more than 90% from its peak sales volume. Yet litigation over NFTs continues onward, and the Ninth Circuit has now held that NFTs are "goods" protectable by trademark law under the Lanham Act. Yuga Labs, LLC v. Ryder Ripps, No. 24-879, 2025 WL 2056060 (9th Cir. July 23, 2025). 

In April 2021, Yuga Labs created the Bored Ape Yacht Club (BAYC) series of NFTs, consisting of 10,000 NFTs with each linked to a cartoon drawing of an ape with different expressions, attire, and accessories. BAYC NFT owners— “Ape holders”—also joined an online and offline social club through which they could access benefits, including interactive digital spaces, branded merchandise, and events featuring musical performances (creating a “strange combination of gated online community, stock-shareholding group, and art-appreciation society”).  

In May 2022, Ryder Ripps, a self-described conceptual artist, who had been criticizing Yuga Labs for allegedly using “neo-Nazi symbolism, alt-right dog whistles, and racist imagery” in their NFTs, minted and sold a parallel series of 10,000 NFTs, each pointing to the same Bored Ape digital images as in Yuga Labs's BAYC series. Calling his collection the Ryder Ripps Bored Ape Yacht Club (RR/BAYC), Ripps's website stated, “By purchasing this Ryder Ripps artwork in the form of an NFT, you understand that this is a new mint of BAYC imagery, re-contextualizing it for educational purposes, as protest and satirical commentary.

Yuga Labs then sued Ripps for trademark infringement. As noted by Professor Tyler Ochoa in Non-Fungible Tokens (NFTs) and Copyright Law, U.S. copyright law does not prevent someone from minting and selling an NFT that links to a work of art that they did not create and do not own. That is why Yuga Labs asserted trademark claims instead. 

Noting that the Lanham Act does not define what constitutes a “good” or a “service” that triggers trademark protection, the Ninth Circuit found instructive the position of the U.S. Patent and Trademark Office ("USPTO") that NFTs are goods covered by the Lanham Act ("Trademarks perform the same functions in NFT markets as they do in other markets . . . . For example, trademarks can be used to indicate the source of underlying assets associated with NFTs, such as digital art, video clips of iconic sports moments, or physical shoes."). The Court also distinguished between intangible NFTs and tangible goods that contained intangible, expressive content because there is a distinction between the tangible good and the intangible aspects of that same good under Dastar.  

     By way of analogy, consider an autographed baseball. If the ball was mass-produced, many people could have the exact same ball. But when one of the balls is signed by a Major League player, the signature transforms it into a unique good with greater value than the other identical-butunsigned balls. NFTs work this way in cyberspace. The autograph on the ball is like the authenticating software code on the digital art file. The digital file may be replicable, allowing many people to access the same piece of art. But attaching the software code to the digital file makes something that is otherwise commonplace, unique. And that uniqueness can confer value. 

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NFTs are marketed and actively traded in commerce. . . . Indeed, consumers purchase NFTs as commercial goods in online marketplaces specifically curated for NFTs. 

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Customers experience the BAYC NFTs as more than a digital deed to or authentication of artwork. BAYC NFTs also function as membership passes, providing “Ape holders” with exclusive access to online and offline social clubs, branded merchandise, interactive digital spaces, and celebrity events. 

Thus, the Ninth Circuit concluded that Yuga's NFTs were “goods” under the Lanham Act. 

Professor Ochoa has commented that the ruling that NFTs are “goods” for purposes of trademark law establishes a precedent, "but it is hard to know whether anyone still cares." He further commented that if the parties were rational, then this case would settle quite easily because the market for NFTs has crashed so "there simply isn't enough money at stake to justify continuing to litigate." But the case might not settle because of "the obvious animosity between the parties" and "the prospect that the prevailing party may be able to recover its attorneys' fees."

Noting "this is one of those cases where I want both parties to lose," Professor Goldman commented  that this decision is "daring each side to spend maybe up to $1M each to get a trial that almost certainly will not produce a result worth that investment."