Rogozinski v. Reddit, Inc.

Background

Jaime Rogozinski alleged that he created the r/WallStreetBets subreddit on Reddit in 2012 and served as its first moderator. He later published a book using the WALLSTREETBETS name, announced a WALLSTREETBETS-branded esports competition, and applied to register WALLSTREETBETS as a trademark. Reddit suspended his account for seven days in April 2020 and told him he could no longer moderate Reddit communities. Reddit later applied to register WALLSTREETBETS and challenged Rogozinski’s attempt to claim ownership of that mark. Rogozinski obtained a federal registration for the related WSB mark in 2022.

Rogozinski asserted eight claims: a declaration that he owned WALLSTREETBETS; infringement of the unregistered WALLSTREETBETS mark; infringement of the registered WSB mark; dilution of the marks by tarnishment; violation of his right of publicity; breach of contract; violation of the duty of good faith and fair dealing; and unfair competition under California law.

Trademark Claims

The court applied the rule that trademark ownership generally depends on priority of use in commerce. Creating a mark, being associated with it, or intending to use it commercially is not enough. The court found that Rogozinski did not allege that he used WALLSTREETBETS in commerce before Reddit did. His allegations about creating the subreddit, controlling its moderation, being identified by the media as its founder, publishing a book, and promoting an esports competition did not establish the required priority of use. The court noted that Rogozinski alleged Reddit had used the mark in commerce by operating the subreddit since January 31, 2012, and that he did not allege an earlier use. Count I was therefore subject to dismissal.

Because Rogozinski did not adequately allege ownership of WALLSTREETBETS, the court also held that he failed to state Count II, his claim for infringement of that unregistered mark. As to Count III, involving the registered WSB mark, the court explained that registration creates a presumption of ownership but that priority of use can defeat that presumption. Rogozinski alleged that Reddit’s use began in April 2020, before his January 2022 application and before the April 2021 first-use date listed in his application. Count III was therefore subject to dismissal.

For Count IV, the court held that Rogozinski had not adequately alleged that WALLSTREETBETS or WSB was sufficiently famous for protection under the federal trademark dilution statute. Allegations that the subreddit received media attention and reached one million subscribers did not meet the required level of widespread recognition and prominence. Count IV was subject to dismissal.

State-Law Claims and Section 230

Reddit argued that Section 230 of the Communications Decency Act barred Counts V through VIII. That law generally protects an interactive computer service from state-law claims treating it as the publisher or speaker of information provided by others. The court found that Reddit was an interactive computer service and that the information at issue came from Rogozinski or other users.

The court held that Counts V, VI, and VII, and part of Count VIII, treated Reddit as responsible for publisher-related decisions. Those theories concerned Reddit’s operation of the subreddit, its suspension of Rogozinski, its failure to reinstate him, or its decisions about users and content. The court therefore held that Section 230 barred those claims. The court identified one exception: Count VIII was not barred by Section 230 to the extent it was based on Reddit’s alleged practice of asserting trademark rights in subreddit names.

Unfair Competition Standing

The court separately examined the surviving theory of Count VIII under California’s Unfair Competition Law. It held that Rogozinski lacked standing because he did not adequately allege the required economic injury caused by Reddit’s alleged trademark practice. Alleged lost book sales were insufficient because lost business opportunities, anticipated profits, or goodwill do not establish the required injury. The alleged loss of an esports contract also did not establish standing: if the contract was prospective, its proceeds were not the required lost money or property; if it was an existing contract, the complaint did not connect the loss to Reddit’s alleged trademark practice rather than to his ban. This portion of Count VIII was subject to dismissal.

Disposition

The court granted Reddit’s motion and dismissed the complaint with leave to amend. Any First Amended Complaint had to be filed by August 11, 2023. The court set a case-management conference for November 17, 2023, with a joint statement due November 9, 2023.