Court Dismisses r/wallstreetbets Creator’s Lawsuit Against Reddit

The United States Northern District of California has dismissed the lawsuit brought by Jaime Rogozinski, the creator of the popular r/wallstreetbets subreddit, against Reddit, Inc. The court ruled with prejudice, meaning that Rogozinski is not allowed to file another amended complaint.

“Defendant Reddit, Inc.’s Motion to Dismiss is hereby GRANTED, and the First Amended Complaint is hereby DISMISSED without further leave to amend,” the decision document read. The dismissal comes after a motion to dismiss was filed by Reddit on September 15, 2023.

Rogozinski initiated the legal action, seeking a declaratory judgment that he, and not Reddit, is the rightful owner of the trademarks “WALLSTREETBETS” and “WSB.”

The court’s decision addressed various claims presented by Rogozinski, including infringement of trademarks, violation of right of publicity, breach of contract, violation of duty of good faith and fair dealing, and unfair competition.

Rogozinski, who launched the r/WallStreetBets subreddit on January 31, 2012, claimed ownership of the trademarks associated with the community. However, the court found deficiencies in his arguments related to first use in commerce, a crucial factor in trademark ownership.

“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,” the court explained.

The court also determined that Rogozinski’s attempts to establish the first use of the WALLSTREETBETS mark in commerce were insufficient, leading to the conclusion that he did not adequately assert ownership rights over the mark. As mentioned earlier, Rogozinski continues to fall short in presenting a convincing case for the initial use of the WALLSTREETBETS mark in commerce.

The judge stated, “To acquire ownership of a trademark, it is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services.”

Even in a hypothetical scenario where Rogozinski successfully establishes priority rights to the WSB mark within the cryptocurrency-related goods and services market, and Reddit’s avatars are considered part of this market, his failure lies in inadequately pleading facts demonstrating infringement. Reddit highlights that Rogozinski does not specify that the avatars showcase the WSB mark or that Reddit has utilized the WSB mark in any manner relevant to this market. This lack of specific allegations mirrors legal precedents where a trademark infringement claim was dismissed because the plaintiff’s mark did not appear in the allegedly infringing television program.

In response to the court’s initial dismissal of his claims in July 2023, Rogozinski filed an amended complaint attempting to address the identified deficiencies. However, Reddit argued that these deficiencies were not adequately rectified, leading to the recent motion to dismiss, which the court has now granted.

The court also addressed Rogozinski’s state law claims, including the alleged violation of the common law right of publicity, breach of contract, violation of duty of good faith and fair dealing, and violation of California’s Unfair Competition Law. These claims were found to be barred by section 230 of the Communications Decency Act, which shields online platforms from certain legal liabilities for content posted by users.

Additionally, the court dismissed Rogozinski’s claim under California’s Unfair Competition Law for lack of standing, as he failed to sufficiently demonstrate injury resulting from Reddit’s actions.

Rogozinski sought a minimum of $1 million in compensation as part of his legal action.

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Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.