Bored Ape NFT spinoff venture gone sour- lawsuits fly

Lawsuits are flying over neon-colored digital depictions of monkeys covered with cake frosting and candles, the latest legal battle to hit the world of NFTs.

Lawsuits are flying over neon-colored digital depictions of monkeys covered with cake frosting and candles, the latest legal battle to hit the world of NFTs. (via REUTERS)

Lawsuits are flying over neon-colored digital depictions of monkeys covered with cake frosting and candles, the latest legal battle to hit the world of NFTs. A group of artists created the so-called Caked Apes in January, a spinoff series of the wildly popular and lucrative Bored Ape Yacht Club collection. Now the artists are suing each other over derivative designs of the nonfungible tokens, or NFTs, and fighting over how to share revenue.

Dueling lawsuits have been filed in Los Angeles federal court. Taylor Whitley filed suit Friday, claiming four Caked Apes members infringed digital designs and ousted him from the project. On Sunday, Jacob Nygard and three members filed their own lawsuit, accusing Whitley of trying to claim ownership of their joint venture and misusing a federal copyright law to get the collection taken off online marketplaces. 

Legal fights are cropping up more frequently in the lucrative world of NFTs, on issues ranging from trademark infringement to ownership. The Bored Ape brand has become a status symbol coveted by celebrity musicians and athletes, with $1.5 billion in all-time sales, according to blockchain data tracker CryptoSlam. It offers an unlimited license to derivative works from the apes, which has led to a number of spinoff projects.

“This is one of the first cases dealing with the Bored Ape license and what's allowed and not allowed,” said John Snow, Nygard's attorney. 

Whitley owns 11 Bored Apes, while Nygard owns three Mutant Apes, which were created by the same founders of Bored Apes and granted similar rights to create derivative works, according to the suit. Clare Maguire, a project member on Nygard's side, owns one Bored Ape design, according to the suit.

Any license he gave his former Caked Apes partners was revoked because neither he nor his digital art agency ever received the “agreed upon portion of revenue,” according to Whitley's complaint. The use of his intellectual property was contingent on him receiving his payment and remaining a part of the project, he said.

The almost 9,000 NFTs of Caked Apes designs sold out, generating $1.9 million in direct sales and $225,000 in royalties from secondary sales, according to Whitley's suit.

Whitley agreed in writing to take 10% of sales and that payment is complete and recorded on the blockchain, Nygard and his partners said in their suit. They allege Whitley is falsely asserting the designs were derived from his intellectual property, including logos reflecting his likeness, and that he was the sole owner of Bored Ape Yacht Club NFTs contained in Caked Apes artwork.

Whitley “contributed no original drawings to the Caked Apes creations,” the four members who sued him said in a statement. “Once Taylor saw the sales of Caked Apes take off, he tried to renege on our agreed-upon deal and claim a bigger piece of the pie with no legal or ethical grounds to back up his claims,” said the members, who have formed a new group called Nxthing World.

Whitley claims in his complaint that the agreement among artists included a 30% cut of primary sales and a 45% share of secondary sales royalties for his digital art agency that hasn't been paid. 

Whitley “was instrumental to all stages of the founding, creation, and launch of Caked Apes and has been unlawfully alienated from his creations,” said his attorney, John Purcell. “We look forward to presenting the facts to the federal court for adjudication.”