Rogozinski v. Reddit, Inc.

Background

Reddit operates an online platform with user-created communities called subreddits. Rogozinski alleged that he launched the r/WallStreetBets subreddit on January 31, 2012, served as its first moderator, created the WALLSTREETBETS logo, and developed the site’s design. He also created related chatrooms, a Discord channel, and a Twitter account using the WALLSTREETBETS name.

Rogozinski applied to register WALLSTREETBETS as a trademark on March 24, 2020. Reddit later suspended his account for seven days and prohibited him from moderating communities. Rogozinski applied to register WSB on January 12, 2022; the registration issued on June 7, 2022, with an asserted first-use date of April 15, 2021.

The court had previously dismissed Rogozinski’s original complaint in its entirety but allowed him to amend. The First Amended Complaint asserted claims for ownership of the WALLSTREETBETS and WSB trademarks, infringement of those marks, violation of the right of publicity, breach of contract, breach of the duty of good faith and fair dealing, and unfair competition under California law.

Legal Standard

Reddit moved to dismiss under Rule 12(b)(6), which permits dismissal when a complaint lacks a legally recognized claim or does not allege enough facts to make the claim plausible. The court was required to accept material factual allegations as true and view them favorably to Rogozinski, but it was not required to accept legal conclusions presented as facts.

Trademark Claims

For the WALLSTREETBETS ownership claim, the court applied the rule that trademark ownership generally depends on priority of use in commerce. The claimant must have been the first to use the mark in the sale of goods or services; merely creating a mark or registering it first is not enough.

The court found that Rogozinski’s allegations about spending several weeks creating the logo and modifying Reddit’s template did not show sufficiently public use identifying or distinguishing goods or services as his own. The court also rejected allegations about the IRC chatroom, Discord channel, and Twitter account because, according to the complaint, those activities occurred after he launched WALLSTREETBETS on Reddit. The court therefore dismissed Count I as to WALLSTREETBETS.

As to WSB, the court noted that federal registration ordinarily provides initial evidence of ownership, but a non-registrant can overcome that presumption by showing earlier use. Rogozinski did not allege that he used WSB before Reddit’s alleged use beginning April 7, 2020. His application asserted a first-use date of April 15, 2021. The court therefore dismissed Count I as to WSB as well.

For the WALLSTREETBETS infringement claim, the court explained that Rogozinski needed to allege both a protectable ownership interest and a likelihood of consumer confusion. Because he again failed to adequately allege first use in commerce and ownership, the court dismissed Count II.

For the WSB infringement claim, the court assumed, for purposes of its analysis, that Rogozinski had adequately alleged priority rights in WSB for cryptocurrency-related goods and services and that Reddit’s avatars fell within that market. Even under that assumption, the court found that he had not alleged that the avatars displayed WSB or that Reddit otherwise used WSB in connection with that market. The court dismissed Count III.

State-Law Claims and Section 230

The court held that section 230 of the Communications Decency Act barred Rogozinski’s right-of-publicity, breach-of-contract, good-faith-and-fair-dealing, and part of his unfair-competition claims. Section 230 generally protects an interactive computer service from state-law liability when the plaintiff seeks to treat it as the publisher or speaker of information supplied by another content provider.

The court rejected Rogozinski’s argument that Reddit acted as a content provider rather than a publisher. He did not allege that Reddit helped create users’ or moderators’ artwork or posts, or required particular content to be posted. The court also ruled that his contract and good-faith claims were based on Reddit’s suspension of him as a moderator, conduct the court viewed as part of Reddit’s publishing role. The court distinguished authority involving a separate promise that created liability apart from publishing conduct.

The remaining unfair-competition theory concerned Reddit’s alleged practice of asserting trademark rights in subreddit brand names. The court had previously dismissed that theory for lack of statutory standing and allowed amendment. In the amended complaint, Rogozinski alleged that he would not have spent more than eight years building an audience if he had known Reddit could take it over. The court held that this allegation of lost time did not establish the required injury or loss of money or property, and dismissed that portion of the unfair-competition claim.

Disposition

The court granted Reddit, Inc.’s motion to dismiss. It dismissed the First Amended Complaint without further leave to amend. The opinion’s earlier claim list describes seven causes of action, while a later heading refers to the unfair-competition claim as “Count VIII”; the disposition nevertheless states that the First Amended Complaint was dismissed.