On August 3, 2022, U.S. District Judge for the Central District of California, Michael W. Fitzgerald, denied a motion to dismiss a case filed by Miles Park McCollum, professionally known as “Lil Yachty,” against two crypto companies called Opulous and Ditto. Opulous sells “non-fungible tokens” (“NFTs”). An NFT is essentially a digital certificate or token which is stored on a digital database called a blockchain. Ownership of the NFT includes ownership over the corresponding unique digital item. For example, the title of a digital artwork could be linked to an NFT, and whoever owns that specific NFT would “own” the artwork. In the present case, Opulous was marketing ownership of Lil Yachty’s songs via their NFTs.
Here is what happened: In May of 2021, Opulous, through its CEO James Lee Parsons, met with Lil Yachty virtually and had a general introductory meeting where Parsons mentioned the possibility of offering Lil Yachty’s music on the new platform via NFTs. No further discussions were ever had, and the transaction never went anywhere. No written, oral, or implied agreement was ever consummated. However, in June 2021, Opulous began a marketing campaign which publicized that Lil Yachty was affiliated with the platform and that his “copyrights” would be available on the platform via the purchase of an NFT.
On January 27, 2022, Lil Yachty filed a claim for trademark infringement in the United States District Court for the Central District of California. Ditto and Parsons filed a motion to dismiss for lack of jurisdiction in California over Opulous and Ditto, both located in the UK. Lil Yachty’s attorneys responded by claiming that Opulous had “sufficient contacts” with the United States.
The Court denied the motion to dismiss, finding Ditto did have “purposeful activities” in the United States because it had advertised live music events in Los Angeles and New York, the website showed offices in Los Angeles and New York and it used social media to advertise to its followers, knowing a large portion of those followers were in the United States.
The Court also exercised jurisdiction over Parsons as an individual since Parsons made multiple tweets stating that Lil Yachty was affiliated with Opulous. The Court found that Parsons was actively and personally involved in the conduct giving rise to Lil Yachty’s claims and therefore exercising jurisdiction in the Central District of California was proper.
Lil Yachty is represented by Adam T. Boumel of The Rousso Boumel Law Firm PLLC.
Ditto and Parsons are represented by Allen B. Grodsky and Tim B. Henderson of Grodsky Olecki & Puritsky LLP.
Counsel information for Opulous was not available since it has not been served nor voluntarily appeared in this action.
The case is Miles Parks McCollum v. Opulous et al., case number 2:22-cv-00587, in the U.S. District Court for the Central District of California.
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