Rogozinski v. Reddit, Inc.

Background

Jaime Rogozinski created the Reddit community r/WallStreetBets in 2012. In 2020, he applied to register the WALLSTREETBETS trademark. Reddit later applied to register the same mark and opposed Rogozinski’s application before the Trademark Trial and Appeal Board (TTAB), an administrative tribunal that handles certain trademark registration disputes.

The TTAB proceeding was suspended ten times for settlement discussions, totaling 600 days. After the TTAB resumed the proceeding, Rogozinski filed this federal case. He asserted claims involving ownership of the WALLSTREETBETS trademark, infringement of the WALLSTREETBETS and WSB trademarks, trademark dilution, right of publicity, breach of contract, breach of the duty of good faith and fair dealing, and unfair competition. Rogozinski then asked the TTAB to suspend its proceedings while the federal case was decided. The TTAB granted that request and suspended both the opposition and cancellation proceedings pending the final disposition of the federal case.

Motion to Stay

Reddit asked the court to stay Counts I through IV, which the court collectively called the “Trademark Claims.” A stay is an order pausing court proceedings. Under the governing standard, the court considered: (1) possible damage from granting a stay, (2) hardship or inequity from requiring a party to proceed, and (3) whether a stay would promote the orderly and efficient resolution of the issues. Reddit, as the party seeking the stay, had the burden of showing that a stay was warranted.

Court’s Analysis

The court first addressed the TTAB’s suspension. For purposes of the motion, the court assumed it had discretion to direct the TTAB to lift its suspension. It then evaluated Reddit’s request under the three factors.

As to possible harm from granting a stay, Rogozinski argued that a stay would delay potential injunctive relief, create uncertainty about his business future, and increase his litigation burden. The court noted that the TTAB cannot award injunctive relief or damages for infringement. But it found that the federal case and TTAB proceeding were not at markedly different stages because the TTAB proceeding had been suspended for much of its existence. The court also found that the claimed uncertainty and litigation burden did not support a stay under the circumstances. This factor therefore weighed neither for nor against a stay.

As to hardship or inequity from proceeding without a stay, Reddit argued that it would have to relitigate trademark-ownership questions, conduct substantial discovery again, and face prejudice from positions Rogozinski had taken in the TTAB proceeding. The court found that the TTAB proceeding was not sufficiently advanced to make proceeding in federal court inequitable: written discovery had occurred, but depositions and expert discovery had not, discovery had not closed, and no dispositive motions had been filed. The court also stated that any relevant inconsistencies between Rogozinski’s positions could be raised in either proceeding. This factor likewise weighed neither for nor against a stay.

The third factor was judicial efficiency. Reddit argued that a TTAB decision could simplify the federal case through issue preclusion, a doctrine that can prevent relitigation of an issue already decided. The court rejected Reddit’s reliance on a discovery-related deemed admission because an issue deemed admitted through failure to respond to discovery is not “actually litigated,” a requirement for issue preclusion. The court also emphasized that the TTAB handles registration questions, while it cannot decide broader questions concerning trademark use, infringement, or unfair competition. Because the federal case included claims beyond the TTAB’s authority, the court found that judicial economy was better served by denying the stay.

Disposition

The court held that the third factor weighed against a stay and that Reddit had not shown that a stay was warranted. Judge Maxine M. Chesney therefore denied Reddit’s Motion to Stay.