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Ninth Circuit:
Trademark Claims by Creator of ‘WallStreetBets’ Forum Fail
Opinion Says Complaint Against Reddit by Original Moderator of Wildly Popular Subgroup, Who Was Suspended for Attempting to Monetize Community, Was Properly Dismissed Where First Use of Mark Was on Platform
By a MetNews Staff Writer
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JAIME ROGOZINSKI plaintiff |
The Ninth U.S. Circuit Court of Appeals held yesterday that a complaint asserting trademark infringement and other claims against Reddit Inc. by the now-deplatformed creator of the wildly popular “WallStreetBets” subgroup—which was responsible for the so-called “meme stock craze of 2021” during which retail traders banded together to bid up shares of the video game retail giant GameStop—was properly dismissed for failure to state a claim.
At issue is whether the founder of the forum, Jaime Rogozinski, had adequately pled ownership over the WALLSTREETBETS mark.
In a memorandum opinion, signed by Circuit Judges Michelle T. Friedland, Daniel A. Bress, and Salvador Mendoza Jr., the court declared that Rogozinski had not stated a valid ownership claim where he failed to allege that the mark was used in commerce before its use on the platform and it was Reddit, not the creator, who provided services to participants in the group.
In his operative complaint, the plaintiff alleges:
“Mr. Rogozinski invested years of his life building the WALLSTREETBETS mark. He built the brand on the social media platform Reddit, and…provided a forum for members to exchange information…related to the financial industry….Mr. Rogozinski offered these services in commerce to the consuming public in order to share the following message…in the aftermath of the Great Recession: you are not powerless in the financial markets….By early 2020, his WALLSTREETBETS forum had grown to more than 1 million subscribers….”
He continues:
“Working to bring WALLSTREETBETS’ empowering message to a larger audience, Mr. Rogozinski authored a book using the same trademark, WALLSTREETBETS, and launched an e-sports trading competition to generate further brand awareness. Again, this was Mr. Rogozinzki’s use of the WALLSTREETBETS trademark in commerce. He also filed a federal trademark application to protect WALLSTREETBETS. Reddit took notice and promptly responded.
“Though Reddit says ‘people should be able to find a welcoming home on our platform,’ the company’s reaction to Mr. Rogozinski was anything but hospitable. Reddit terminated Mr. Rogozinski as a moderator of his forum, claiming he had violated company policy by ‘attempting to monetize a community.’ ”
The plaintiff claims that “by seizing control of the forum,” the company has caused him financial harm and asserts trademark infringement claims and a cause of action for violation of his right of publicity under California law, claiming that the mark “has become identified with Mr. Rogozinski,” among other grounds for relief.
He seeks damages and a declaratory judgment that he, and not Reddit, is the owner of the WALLSTREETBETS and accompanying WSB trademarks.
District Court’s View
After Reddit filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), Senior District Court Judge Maxine Chesney of the Northern District of California dismissed the plaintiff’s operative complaint for failure to state a claim upon which relief may be granted, without leave to amend. The order follows an earlier dismissal of the original complaint on the same grounds.
Chesney noted that the standard test for ownership in trademark law is priority of use and wrote:
“Although, as Rogozinski points out, ‘trademark rights can vest even before any goods or services are actually sold if the totality of one’s prior actions, taken together, can establish a right to use the trademark’…, Rogozinski fails to make the requisite factual showing. In particular, the mark must be ‘use[d] in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.’ ”
Finding that the Rogozinski’s only allegation of using the mark before the creation of the Reddit group was that he “spent several weeks creating the WALLSTREETBETS logo and developing the overall look, feel, and design of the site…to modify Reddit’s template page,” she said these facts are “readily distinguishable from the circumstances deemed sufficient by the Ninth Circuit and other courts.”
As to his right-of-publicity claim, she pointed to the immunity protections for social media platforms found in §230 of the Communications Decency Act. The section protects providers of interactive online services from being treated as the publisher or speaker of content posted by third parties.
Rejecting the plaintiff’s assertion that “ ‘WALLSTREETBETS’ artwork and even its editorial agenda is under the influence of Reddit,” Chesney said:
“Rogozinski…does not allege Reddit had a hand in creating, even in part, any artwork or posts by users or moderators nor that Reddit required any content to be posted.”
Ninth Circuit’s View
Friedland, Bress, and Mendoza pointed out that, in order to acquire ownership of a trademark, it is not enough that a party invented or registered it first. Rather, the one asserting rights must have been the first to actually use the mark in commerce.
Applying the principle to the present case, they opined:
“Here, the core of the services at issue are the provision and hosting of r/WallStreetBets—an online forum-based community in which Reddit users exchange financial information. Rogozinski does not allege that he had previously used WALLSTREETBETS in commerce prior to its use on the r/WallStreetBets subreddit….”
They continued:
[B]y Rogozinski’s own allegations, it was Reddit that created and provided the services that enabled Reddit’s many users to contribute to the discussion on the r/WallStreetBets subreddit by, for example, posting and engaging with one another about various trading strategies. Even if Rogozinski played a prominent role among those users, he has not stated a valid ownership claim over the WALLSTREETBETS mark.”
As to his right of publicity claim, the jurists declared:
“To the extent that Rogozinski’s right-of-publicity claim seeks to hold Reddit liable for third-party content to which Rogozinski objects, that claim is barred by 47 U.S.C. §230, unless Rogozinski specifically alleged that Reddit ‘is itself responsible, in whole or in part, for the creation or development of the offending content.’...Here, the only allegation in the Complaint suggesting that Reddit was even partially responsible for content posted on r/WallStreetBets after Rogozinski’s suspension is that Reddit once ‘partnered’ with r/WallStreetBets moderators to provide users with digital artwork. But that is not enough to state a right-of-publicity claim because nothing in that artwork is alleged to have had any ‘uniquely distinguishing features’ that made the offending content ‘peculiar to’ Rogozinski.”
The case is Rogozinski v. Reddit Inc., 24-735.
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