At a time when war is raging, Covid endures, kids are being shot in schools, and inflation threatens a new recession, what is it that America’s brightest legal minds are obsessing over? For some, it’s Seth Green and his Bored Ape, a tale about ownership in the crypto age that exploded into public this week.
For those not familiar, there’s a series of 10,000 ape N.F.T.s known as the Bored Ape Yacht Club—highly-prized digital collectables living on the Ethereum blockchain. Green, best known for Austin Powers and Buffy the Vampire Slayer, purchased one of the apes (#8398), named Fred, and then planned on having this ape star in a new animated series. But then, Green fell victim to a phishing scam. “Days before he’s set to make his world debut, he’s literally kidnapped,” Green said at a recent N.F.T. conference.
Believe it or not, this isn’t the first Bored Ape to be, um, kidnapped, and the N.F.T. marketplace OpenSea is facing a few negligence lawsuits for not doing more to impede hacks and scams. (OpenSea is pushing for arbitration in those cases and didn’t respond to a request for comment.) Yet this story isn’t about lax security in crypto, but rather about what happens now? Can Green move forward with his new show? The concerned actor/producer is now pleading with the individual who subsequently bought #8398—a collector known as “DarkWing84”—for Fred’s safe return, and some news sites are sending lawyers into a tizzy by dragging in copyright law, a subject that will forever be mangled in the popular press.
For a good rundown of the legal issues surrounding Fred the Ape, check out this epic thread from Cornell law professor James Grimmelman, who talks about the distinction between ownership and possession; how the basic function of property law is to restore possession to the rightful owner; how certain transfers of possession change title while others do not; the test that’s used to decide whether a good-faith purchaser gets to keep stolen property; and some of the possible wrinkles posed by the blockchain.
The license for the Bored Ape Yacht Club states: “Ownership of the N.F.T. is mediated entirely by the Smart Contract and the Ethereum Network.” In the end, Grimmelman sees a lot of ambiguity in the license and isn’t sure who gets to exploit the copyright to the ape, meaning the ability to authorize and profit from derivatives. Complicating matters further, it’s not really clear whether Green even acquired exclusive rights in the first place. Perhaps not!
I’m not going to solve this mystery, but I will give Green some fair warning before he embarks on any “precedent setting” lawsuit: Be prepared for that journey to last decades.
Think I’m exaggerating? Well, let me tell you about Eleanor the Car. In 1974, H.B. “Toby” Halicki produced, directed and wrote Gone in 60 Seconds, about a group of car thieves tasked with stealing 48 exotic muscle cars. The star of the film—actually listed in the opening credits of the movie—was a Ford Mustang named “Eleanor,” a particularly treasured vehicle that, as the story goes, was especially elusive to capture. (Obviously, it wasn’t on the blockchain.)
After the 2000 release of the remake starring Nic Cage, Angelina Jolie, and Eleanor (this time a customized 1967 GT500), Denise Halicki—Toby’s widow—exhibited Eleanor at car shows, where she ran into Carroll Shelby, once a legendary race car driver who began working for Ford in the 1960s and who designed some notable race cars, including arguably a key one that appeared in the Cage film.
A few years later, Halicki sued Shelby over some unauthorized replicas of Eleanor that had been manufactured and sold. In 2008, the case traveled all the way up to the 9th Circuit Court of Appeals, which decided that the widow had standing to pursue a copyright claim. As to whether Eleanor was entitled to copyright protection or “simply a car,” the appeals court remanded that issue down to a district court. The case then settled. According to papers I’ve reviewed, Halicki was acknowledged to be the owner of the Eleanor character with certain trademark rights, too; Shelby was acknowledged to own trade dress rights to the GT500 and could continue selling the car.
The dispute is relatively well known in intellectual property spheres, and the 9th Circuit opinion would later be cited when DC Comics famously sued someone who had made a replica of the Batmobile. But what will surprise pretty much everyone, I’ll bet, is that Halicki’s and Shelby’s heirs are still involved in a court fight to this day.
In 2019, around the time that the Oscar-nominated film Ford v. Ferrari was renewing interest in Shelby (portrayed by Matt Damon), Halicki learned about some cars being showcased at auctions. She sent out a series of cease and desist letters to Shelby’s customers, including one that allegedly demanded that a “Shelby” mark be replaced with an “Eleanor” mark plus a license fee remitted to her.
Now, Shelby is suing for breach of the settlement contract, and Halicki is making counterclaims for copyright and trademark infringement, with the director’s widow contending that these very real automobiles are misappropriating the character. The two sides will brief a judge this month on the copyrightability of Eleanor. Shelby argues the car’s features have been too inconsistent over time to deserve the kind of protection given to, say, Superman. Halicki responds that the copyright has repeatedly been acknowledged—and the car is recognized wherever she goes. Shelby hits back that regardless, this doesn’t give Halicki the right to make claims against innocent buyers, and that she can’t have a monopoly on a car body design based on what’s in a movie.
If those interested in Bored Apes sense something resonant in all of this, well, a hearing in the Eleanor case is scheduled for June 13 in California federal court, with a possible trial commencing in August. I’m sure Seth Green, who once appeared in the heist flick The Italian Job and says he’s spent the last 18 years studying copyright law, may attend if he wishes.