Rogozinski v. Reddit, Inc.

• Court: District Court, N.D. California
• Decided: June 30, 2023
• Docket: 3:23-cv-00686
• Status: Unknown

Opinion

1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 JAIME ROGOZINSKI, Case No. 23-cv-00686-MMC

8 Plaintiff, ORDER DENYING DEFENDANT’S 9 v. MOTION TO STAY

10 REDDIT, INC., Re: Dkt. No. 29 11 Defendant.

12 13 Before the Court is defendant Reddit, Inc.’s (“Reddit”) “Motion to Stay Claims,” 14 filed April 10, 2023. On May 15, 2023, plaintiff Jaime Rogozinski (“Rogozinski”) filed 15 opposition, to which Reddit, on June 1, 2023, replied. Thereafter, on June 13, 2023, 16 Rogozinski filed a statement of recent decision, to which both parties filed responses. 17 Having read and considered the papers filed in support of and in opposition to the motion, 18 the Court rules as follows.1 19 BACKGROUND 20 On January 31, 2012, Rogozinski created on Reddit, “a social media platform” 21 where “millions of people around the world post, vote, and comment in communities 22 organized around their interests” (see Compl. ¶ 19), a “subreddit” called 23 “r/WallStreetBets,” a “forum where people share stock and other financial advice,” which 24 “[b]y early 2020, . . . had grown to more than 1 million subscribers, earning recognition 25 from the financial press” (see Compl. ¶¶ 1-2). 26 On March 24, 2020, Rogozinski filed an application with the United States Patent 27 1 and Trademark Office (“USPTO”) to register the mark WALLSTREETBETS for, inter alia, 2 “online and print publications in the fields of trading and finance” in International Class 16 3 and “providing an online forum for financial and trading information” in International Class 4 38. (See Compl. ¶ 35.) Two weeks later, on April 7, 2020, Reddit notified Rogozinski 5 that “his account had been placed on a seven-day suspension” and that he was “no 6 longer permitted to moderate communities” (see Compl. ¶ 36), after which Reddit, on 7 May 11, 2020, filed an application with the USPTO to register the mark 8 WALLSTREETBETS for “[h]osting an online website community” in International Class 42 9 (see Compl. ¶ 41; Decl. of Holly Pranger in Supp. of Def.’s Mot. to Stay Action (“Pranger 10 Decl.”), Ex. C at 2).2 11 On May 15, 2020, the USPTO notified Rogozinski that his registration of the mark 12 WALLSTREETBETS was refused, noting “Reddit is the one providing the online forum, 13 not the applicant.” (See Pranger Decl. Ex. A at 3.) Subsequently, on May 27, 2020, 14 Rogozinski amended his application as to Classes 16 and 38, asserting as the basis for 15 filing, an intent to use the mark. (See Pranger Decl. Ex. B at 2-3.) On August 18, 2020, 16 Reddit filed a notice of opposition with the USPTO’s Trademark Trial and Appeal Board 17 (“TTAB”), requesting denial of Rogozinski’s application, based on “[p]riority and likelihood 18 of confusion” and “no bona fide intent to use the mark in commerce.” (See Pranger Decl. 19 Ex. H at 3.) 20 On October 23, 2020, the opposition proceeding was suspended for thirty days to 21 allow for settlement discussions. (See Decl. of James R. Lawrence, III in Supp. of Pl.’s 22 Opp’n (“Lawrence Decl.”), Ex. A at 1.) Ultimately, between October 23, 2020, and 23 November 9, 2022, the opposition proceeding was, at the parties’ respective unopposed 24 requests, suspended a total of ten times, for periods ranging between thirty and ninety 25 2 On February 4, 2021, the USPTO, citing Rogozinski’s application as a “[p]rior- 26 filed potentially conflicting pending application” and finding “[i]f the mark in [Rogozinski’s] application . . . registers, the USPTO may refuse registration of [Reddit’s] mark . . . 27 because of a likelihood of confusion with the registered mark,” suspended Reddit’s 1 days, for a total of 600 days, to allow for settlement discussions. (See Lawrence Decl. 2 Ex. A.) 3 During one of those suspensions, Rogozinski, on January 12, 2022, filed an 4 application to register the mark WSB, “shorthand for WALLSTREETBETS.” (See Compl. 5 ¶ 56.) Reddit did not oppose that registration, which, on June 7, 2022, the USPTO 6 issued as U.S. Trademark Registration No. 6754487. (See Compl. ¶ 56.) 7 On January 26, 2023, during the tenth suspension of the opposition proceeding, 8 the parties held a settlement conference that did not result in a resolution (see Def.’s Mot. 9 to Stay Claims (“Def.’s Mot.”) at 4:10-12, Dkt. No. 29), after which, on February 15, 2023, 10 the TTAB, upon Reddit’s motion, ordered the opposition proceeding to resume and set 11 discovery to close on March 26, 2023, with briefing to close on January 20, 2024 (see 12 Pranger Decl. Ex. M at 2). 13 On the same day that the TTAB lifted the suspension, February 15, 2023, 14 Rogozinski filed the instant action, asserting claims for (1) “a declaratory judgment that 15 he, and not Reddit, is the owner of the WALLSTREETBETS trademark” (Count I); (2) 16 “infringement of WALLSTREETBETS trademark” in violation of Lanham Act § 43(a), 15 17 U.S.C. § 1125(a) (Count II); (3) “infringement of registered WSB trademark” in violation of 18 Lanham Act § 32, 15 U.S.C. § 1114 (Count III); (4) “trademark dilution by tarnishment” in 19 violation of Lanham Act § 43(c), 15 U.S.C. § 1125(c) (Count IV); (5) “violation of right of 20 publicity” (Count V); (6) “breach of contract” (Count VI); (7) “violation of duty of good faith 21 and fair dealing” (Count VII); and (8) “unfair competition” in violation of Cal. Bus. & 22 Professions Code § 17200, et seq. (Count VIII). (See Compl. at 20-25.) 23 Six days later, on February 21, 2023, Rogozinski filed before the TTAB a motion to 24 suspend the opposition proceeding pending the outcome of the instant action, which 25 motion Reddit opposed. (See Pranger Decl. Ex. O.) On April 3, 2023, the TTAB 26 suspended the opposition proceeding “pending the disposition of [Rogozinski’s] February 27 21, 2023 motion to suspend proceedings” (see Pranger Decl. Ex. P), and while that 1 mark (see Pranger Decl. Ex. Q). On June 12, 2023, after the reply in support of the 2 instant motion had been filed, the TTAB consolidated the cancellation proceeding with 3 the opposition proceeding, granted Rogozinski’s motion, and suspended both 4 proceedings “pending the final disposition of the civil action,” namely, the instant case. 5 (See Pl.’s Statement of Recent Decision, Ex. A (“TTAB Suspension Decision”) at 7.) 6 LEGAL STANDARD 7 “[T]he power to stay proceedings is incidental to the power inherent in every court 8 to control the disposition of the causes on its docket with economy of time and effort for 9 itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). 10 In deciding whether to stay proceedings pending resolution of another action, a 11 district court must weigh “the competing interests which will be affected by the granting or 12 refusal to grant a stay,” including (1) “the possible damage which may result from the 13 granting of a stay,” (2) “the hardship or inequity which a party may suffer in being 14 required to go forward,” and (3) “the orderly course of justice measured in terms of the 15 simplifying or complicating of issues, proof, and questions of law which could be 16 expected to result from a stay.” See Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th 17 Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). The 18 proponent of a stay bears the burden of showing such relief is warranted. See Clinton v. 19 Jones, 520 U.S. 681, 708 (1997). 20 DISCUSSION 21 By the instant motion, Reddit seeks an order staying Counts I, II, III, and IV 22 (collectively, “Trademark Claims”). 23 A. TTAB’s Suspension 24 At the outset, the Court addresses the parties’ respective positions, as set forth in 25 their supplemental filings, with regard to the effect of the TTAB’s recent suspension of 26 proceedings pending resolution of this case. In Tigercat Int'l, Inc. v. Caterpillar Inc., 2018 27 WL 2049816 (D. Del. May 2, 2018), as Reddit points out, the district court granted a 1 action,” see id. at *2. As Rogozinski notes, however, the TTAB, in suspending its 2 proceeding, stated that if the court granted a stay, “the [TTAB] proceedings [would] 3 resume,” see id., which qualification is absent here (see Pl.’s Opp’n to Def.’s Mot. for 4 Admin. Leave to File Resp. to Pl.’s Statement of Recent Decision at 2:23-26, Dkt. No. 5 42); see also Georgia-Pac. Consumer Prod., L.P. v. Nextep, Inc., 2010 WL 11595122, at 6 *6 (D. Nev. Mar. 3, 2010) (finding “[i]n light of the TTAB’s suspension order, . . . 7 [d]efendants’ grounds for requesting the stay,” i.e., “that the TTAB had been litigating 8 th[e] issue for three years and was close to a decision,” were “moot”). 9 This Court, for purposes of the instant motion, will assume it has the discretion to 10 direct the TTAB to lift the suspension of its proceedings, and, accordingly, next turns to 11 the parties’ arguments as set forth in the initial briefing. 12 B. Stay 13 1. Damage Resulting from Granting of Stay 14 The Court begins its analysis with a review of the “possible damage which may 15 result from the granting of a stay.” See Lockyer, 398 F.3d at 1110 (internal quotation and 16 citation omitted). In that regard, Rogozinski argues that “staying this case would harm 17 [him] in at least three ways.” (See Pl.’s Opp’n to Def.’s Mot. to Stay (“Pl.’s Opp’n”) at 18 11:18, Dkt. No. 32.) The Court considers below each asserted harm. 19 First, Rogozinski, noting “[t]he TTAB cannot provide . . . any injunctive relief,” 20 argues his “time to relief” will be delayed in that he “would be tasked with litigating the 21 TTAB cases through any appeals[,] . . . pushing the possibility of injunctive relief against 22 Reddit even further into the future.” (See Pl.’s Opp’n at 11:19-25, 12:8); see also 23 Rhoades v. Avon Prod., Inc., 504 F.3d 1151, 1163 (9th Cir. 2007) (holding TTAB, “unlike 24 a federal district court, . . . cannot give relief for an infringement claim, either injunctive or 25 by way of damages” (citing 15 U.S.C. §§ 1063(a), 1064, 1067(a)) (alteration omitted)). 26 “[C]ourts have relied on delay as a reason to deny a stay where the plaintiff is 27 seeking injunctive relief and a delay of months or years would allow the defendant to 1 2015) (citing LG Elecs., Inc. v. Eastman Kodak Co., 2009 WL 1468703, at *2 (S.D. Cal. 2 May 26, 2009)); see also Rhoades, 504 F.3d at 1163 (noting “where an infringement 3 claim is involved . . . there is often some urgency” in that “[o]ngoing business conduct is 4 likely to be involved and harm, possibly irreparable, may be accruing”). 5 In either forum, of course, prior to any relief being granted, Rogozinski’s trademark 6 claims would need to be adjudicated, and, in that regard, Reddit argues, the opposition 7 proceeding “is more than two years advanced, discovery is set to close, and summary 8 judgment looms, which will provide [Rogozinski] with an outcome on his trademark rights 9 sooner than in this Court.” (See Def.’s Reply in Supp. of its Mot. to Stay Claims (“Def.’s 10 Reply”) at 9:3-4, Dkt. No. 36.) Although, as Reddit points out, the opposition proceeding 11 is more than two years along, whereas the instant action was filed four and a half months 12 ago, the opposition proceeding, as noted, was suspended for a combined 600 days to 13 allow for settlement discussions, and consequently, has been active for just under a year. 14 In other words, the TTAB proceeding and the above-titled action are not at markedly 15 different stages of litigation. 16 Second, Rogozinski argues, he will be harmed by “uncertainty regarding [his] 17 business future.” (See Pl.’s Opp’n at 12:10-11.) To the extent he argues any uncertainty 18 is due to the pendency of the cancellation proceeding (see id. at 12:11-16), however, 19 Rogozinski himself moved to suspend that proceeding, thereby prolonging the 20 uncertainty he claims (see Reddit, Inc. v. Jaime Rogozinski, Cancellation No. 92082038, 21 Respondent’s Mot. to Suspend Proc., May 18, 2023). 22 Third, Rogozinski argues, he will be harmed by the “litigation burden” of “litigat[ing] 23 three separate cases.” (See Pl.’s Opp’n at 12:17-18.) After Rogozinski filed his 24 opposition brief, however, the TTAB, as noted, consolidated the opposition and 25 cancellation proceedings, and, as to the instant case, Rogozinski was the filer and, 26 consequently, is responsible for any increased burden attributable thereto. 27 Accordingly, the Court finds the first factor weighs neither in favor of nor against a 1 2. Hardship or Inequity Party May Suffer Absent Stay 2 The Court next considers “the hardship or inequity which a party may suffer in 3 being required to go forward.” See Lockyer, 398 F.3d at 1110 (internal quotation and 4 citation omitted). 5 Reddit argues that “if a stay is denied,” it “would be forced to relitigate the same 6 questions related to ownership of the ‘WALLSTREETBETS’ mark that it has been 7 litigating in the TTAB proceedings for over two years, and which will be fully adjudicated 8 in the near future,” and that “[t]he Court should not indulge [Rogozinski’s] attempt to 9 move the parties’ trademark dispute to a new forum, particularly because the TTAB 10 proceedings have progressed to such an advanced stage.” (See Def.’s Mot. at 7:17-22.) 11 As discussed above, however, and contrary to Reddit’s characterization, the TTAB 12 proceedings have not progressed to an “advanced stage.” The opposition proceeding, as 13 noted, had been in suspended status for nearly two-thirds of its existence. Although the 14 parties have conducted some written discovery, no depositions have been taken, no 15 expert discovery has been conducted, discovery has not closed, and no dispositive 16 motions have been filed. In the cases Reddit cites, where courts have found hardship 17 and/or inequity would result absent a stay, the TTAB proceeding was closer to a decision 18 and significantly more work had been performed therein. See Tigercat, 2018 WL 19 2049816, at *1, *6 (finding “it unacceptable that [plaintiff] decided to invoke the power of 20 the court . . . two months before the start of trial before the TTAB”; noting parties in TTAB 21 proceeding had “produced over 35,000 pages of documents,” had “taken a total of 22 22 depositions, including seven expert depositions and three third-party depositions,” had 23 produced “consumer surveys . . . and expert advice,” and that “disputes between the 24 parties during the opposition proceedings required intervention by the TTAB and two 25 Federal District Court Judges”); Anstalt v. Bacardi & Co., 2016 WL 7635955, at *4 (C.D. 26 Cal. Nov. 16, 2016) (finding “it would clearly be inequitable for . . . case to proceed” 27 where “[i]t was not until the day before dispositive motions were due [in TTAB 1 Oils Ltd. v. Meenakshi Overseas LLC, 2016 WL 1268008, at *6 (E.D. Cal. Mar. 31, 2016) 2 (staying action where plaintiff had appealed TTAB’s decision to Court of Appeals for 3 Federal Circuit). 4 Next, Reddit argues, the denial of a stay “will force [Reddit] to reengage in 5 substantial discovery” when “the parties have already exchanged written discovery” in the 6 TTAB proceeding. (See Def.’s Mot. at 8:4-7.) Rogozinski, responding that Reddit 7 “overstates the impact of discovery,” asserts “[t]he same discovery, subject to certain 8 numerical limits on written discovery, will be available to Reddit in this lawsuit.” (See Pl.’s 9 Opp’n at 11:1-2.) Reddit, in its reply, does not address Rogozinski’s assertion. 10 Moreover, it is not unusual for parties opposing one another in two separate cases to 11 agree that any discovery provided in one such case will be deemed provided in the other. 12 Lastly, Reddit argues, “[a]llowing [Rogozinski] to use a new forum to avoid the 13 implications of the positions he has taken in the TTAB proceedings will prejudice Reddit.” 14 (See Def.’s Mot. at 8:19-20.) In particular, Reddit asserts that “facts have already been 15 established or admitted in the TTAB that bear on the [Trademark Claims], at times 16 directly contradicting [Rogozinski’s] arguments in his Complaint.” (See Def.’s Mot. at 8:8- 17 9 (noting Rogozinski, in opposition proceeding, provided verified interrogatory response 18 that a planned “WSB Championship” e-sports trading competition “ha[d] not taken place 19 due to complications caused by the COVID-19 global pandemic,” whereas in the instant 20 Complaint, Rogozinski pleaded that, as a “consequence of Reddit’s ban[ning]” him as 21 moderator, his “company lost its contract for the e-sports trading competition in Texas, 22 costing him millions of dollars” (citing Pranger Decl. Ex. R at 12; Compl. ¶ 58)).) Any 23 such arguable inconsistencies, however, can, if relevant, be brought out and argued in 24 either action, and, consequently, Reddit fails to show it would suffer hardship or inequity 25 in that regard. 26 Accordingly, the Court finds the second factor weighs neither in favor of nor 27 against a stay. 1 3. Orderly Course of Justice 2 Lastly, the Court considers “the orderly course of justice measured in terms of the 3 simplifying or complicating of issues, proof, and questions of law which could be 4 expected to result from a stay.” See Lockyer, 398 F.3d at 1110 (internal quotation and 5 citation omitted). “The deciding factor should be efficiency.” See Rhoades, 504 F.3d at 6 1165. 7 Here, Reddit argues, “staying the [Trademark Claims] in favor of their adjudication 8 before the TTAB will . . . simplify the issues before this Court because of the preclusive 9 effect of a ruling in the TTAB.” (See Def.’s Reply at 2:17-19); see also B & B Hardware, 10 Inc. v. Hargis Indus., Inc., 575 U.S. 138, 141–42 (2015) (holding “a court should give 11 preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met”). 12 In support thereof, Reddit asserts that Rogozinski, by failing to respond to Reddit’s 13 discovery requests in the opposition proceeding, is “deem[ed] . . . to have admitted that 14 ‘the use of WALLSTREETBETS as the name of the subreddit r/wallstreetbets is use by 15 Reddit, not by [Rogozinski],’” and that consequently, he “cannot establish priority over 16 Reddit’s use.” (See Def.’s Mot. at 6:21-25 (quoting Reddit, Inc. v. Jaime Rogozinski, 17 Opposition No. 91264289, Opposer’s First Set of Requests for Admission to Applicant at 18 7, Dec. 11, 2020).) 19 In response, Rogozinski argues Reddit’s assertion is “an overstatement,” in that 20 his admission is “not equivalent to conceding priority of trademark use.” (See Pl.’s Opp’n 21 at 8:5, 8:22-25.) More importantly, as Rogozinski argues, and as to which Reddit makes 22 no response, any TTAB determination based on the deemed admission would not have 23 preclusive effect. See In re Pizante, 186 B.R. 484, 489-90 (B.A.P. 9th Cir. 1995), aff'd, 24 107 F.3d 878 (9th Cir. 1997) (affirming denial of collateral estoppel where “judgment was 25 based on [party’s] failure to respond to discovery requests”; holding “where issues are 26 deemed admitted due to a party's failure to comply with discovery requests, the ‘actually 27 litigated’ element of collateral estoppel is unsatisfied”); see also Restatement (Second) of 1 estoppel to apply). 2 Moreover, as the Ninth Circuit has noted, “where the district court action involves 3 || only the issue of whether a mark is entitled to registration, it might make more sense to 4 resolve the registration claims at the TTAB first,” see Rhoades, 504 F.3d at 1165 (internal 5 || quotation and citation omitted), and here, by contrast, Rogozinski brings claims over 6 || which the TTAB lacks jurisdiction, see 6 J. Thomas McCarthy, McCarthy on Trademarks 7 || and Unfair Competition § 32:48 (5th ed. 2023) (noting TTAB has jurisdiction “only . . . to 8 decide questions concerning the registration of marks”). Indeed, the TTAB, in 9 || Suspending proceedings pending the final disposition of the instant action, noted the 10 instant action “involves claims over which the District Court, rather than the [TTAB], has 11 jurisdiction.” (See TTAB Suspension Decision at 6 (stating TTAB “is not authorized to g 12 || determine the right to use, nor may it decide broader questions of infringement or unfair s 13 || competition”).) 14 Given the above circumstances, the Court finds judicial economy is better served 2 15 || by denying a stay, and, accordingly, finds the third, and, in this instance, deciding, factor a 16 || weighs against a stay. g 17 CONCLUSION S 18 For the reasons stated above, Reddit’s Motion to Stay is hereby DENIED. 19 20 IT IS SO ORDERED. 21 22 || Dated: June 30, 2023 bane Cat INE M. CHESNEY 23 United States District Judge 24 25 26 27 3 The Court further notes that not all of Rogozinski’s other claims are derivative of 2g || his Trademark Claims.