A Bored Ape Lawsuit Won’t Set the NFT Precedent Seth Green Wants

The first thing you should probably do if you find yourself in Seth Green’s position is not tweet about how much you’re “looking forward to precedent setting debates on IP ownership & exploitation.”

Green, an actor best known for his pouty portrayal of archvillain Dr. Evil’s disappointing son in the Austin Powers franchise, has become the butt of crypto’s latest bad joke. Earlier this month, Green lost his prized Bored Ape when he fell for a scam and made himself vulnerable to thieves by interacting with a clone of another NFT project’s website. Clone sites can be virtually indistinguishable from the originals, often with only a letter or two missing from their domain names. Green is not the first to lose an NFT this way, and he won’t be the last. Hacking and good old-fashioned con artistry are endemic in the magical world of Gutter Cats and Happy Hippos.

What makes Green unique is that he had a lot more riding on his Ape than most members of the Yacht Club. Unlike many NFTs, Bored Apes come with a license to make personal or commercial use of your new primate pal. When you purchase an Ape, you are granted the right to reproduce its image and create derivative works. Green had planned to do just that. For months, he has been developing a series called White Horse Tavern, which combines live action and animation and stars an Ape with a halo and endearing intimacy issues as the titular watering hole’s bartender.

But with the star missing, the show likely can’t go on. According to the Bored Ape Yacht Club (BAYC) terms and conditions, the right to exploit an Ape’s image follows the NFT. After a BuzzFeed article got the internet talking about how White Horse Tavern is now doomed, Green tweeted in response, “Not true since the art was stolen. A buyer who purchased stolen art with real money and refuses to return it is not legally entitled to exploitation usage of the underlying IP.”

Incorrect. This latest Ape affair illustrates the limits of the free, frictionless world promised by crypto—and its many misunderstandings around ownership.

Green’s claim about stolen art would be true if the stolen work of art in question was, say, Jeff Koons’ Rabbit. Whether a buyer purchased the stolen sculpture with “real” or unreal money, Koons would still have the exclusive right to, God forbid, make a life-affirming romantic dramedy starring the quicksilver critter. The default–which applies to both traditional art objects and crypto art–is that the author holds the copyright regardless of what happens to the artwork. But by tying the rights to the NFT, the Apes’ licensing scheme makes them different animals.

It’s not that anyone who goes around stealing simians has carte blanche to launch their own BAYC restaurant. If Green’s Ape were still in the thief’s wallet, Green would still be legally regarded as the “true owner,” with his right to exploit the underlying intellectual property left undisturbed. Unfortunately for Green, the Ape was quickly flipped to a user known as DarkWing84 for $200,000 and the law protects buyers who inadvertently shell out for stolen property. Assuming DarkWing84 wasn’t in on the scheme, they now own the Ape and the right to make him the star of a TV show about life and love in the big city. While Apes have gone for six figures, $200,000 was probably not a low enough price to put someone on notice that this particular Ape had a sordid past.

Because there is so little law on the books about NFTs and the transfer of intellectual property rights via smart contract, it’s true that a lawsuit over Green’s Ape could set meaningful precedent. But it wouldn’t be the kind Green seems to think it would be. If DarkWing84 took Green to court to prevent him from moving forward with White Horse Tavern, they would likely prevail. Green’s only real hope is to steer clear of litigation all together and settle this quietly. Announcing to the world that he has been robbed and crowing about going down in legal history is making such a possibility increasingly remote. Next time you think you’ve got the trial of the century on your hands, please talk to your attorney before you talk to Twitter.

Green’s outspokenness also makes him a highly visible target for future scams. Last week at the NFT conference VeeCon, Green said he had found it “encouraging” to see “how many people approached me and said ‘we’ve got to do something about this’” when he went public about the theft. There’s a good chance that many of those concerned souls were fraudsters themselves. Once the cryptoverse knows you’ve been fooled once, you’re likely to be besieged by bad actors hoping they can fool you twice, offering to help you recover your NFT for a fee.

While the possibilities of crypto art continue to inspire artists working in a range of media, tethering rights with off-chain value to on-chain assets continues to be a risky proposition.