Opinion
23-cv-00686-MMC
06-30-2023
JAIME ROGOZINSKI, Plaintiff, v. REDDIT, INC., Defendant.
ORDER DENYING DEFENDANT'S MOTION TO STAY RE: DKT. NO. 29
MAXINE M. CHESNEY United States District Judge
Before the Court is defendant Reddit, Inc.'s (“Reddit”) “Motion to Stay Claims,” filed April 10, 2023. On May 15, 2023, plaintiff Jaime Rogozinski (“Rogozinski”) filed opposition, to which Reddit, on June 1, 2023, replied. Thereafter, on June 13, 2023, Rogozinski filed a statement of recent decision, to which both parties filed responses. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.
By order filed June 16, 2023, the Court took the matter under submission.
BACKGROUND
On January 31, 2012, Rogozinski created on Reddit, “a social media platform” where “millions of people around the world post, vote, and comment in communities organized around their interests” (see Compl. ¶ 19), a “subreddit” called “r/WallStreetBets,” a “forum where people share stock and other financial advice,” which “[b]y early 2020, . . . had grown to more than 1 million subscribers, earning recognition from the financial press” (see Compl. ¶¶ 1-2).
On March 24, 2020, Rogozinski filed an application with the United States Patent and Trademark Office (“USPTO”) to register the mark WALLSTREETBETS for, inter alia, “online and print publications in the fields of trading and finance” in International Class 16 and “providing an online forum for financial and trading information” in International Class 38. (See Compl. ¶ 35.) Two weeks later, on April 7, 2020, Reddit notified Rogozinski that “his account had been placed on a seven-day suspension” and that he was “no longer permitted to moderate communities” (see Compl. ¶ 36), after which Reddit, on May 11, 2020, filed an application with the USPTO to register the mark WALLSTREETBETS for “[h]osting an online website community” in International Class 42 (see Compl. ¶ 41; Decl. of Holly Pranger in Supp. of Def.'s Mot. to Stay Action (“Pranger Decl.”), Ex. C at 2).
On February 4, 2021, the USPTO, citing Rogozinski's application as a “[p]rior-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 . . . because of a likelihood of confusion with the registered mark,” suspended Reddit's application. (See Pranger Decl. Ex. G at 2.)
On May 15, 2020, the USPTO notified Rogozinski that his registration of the mark WALLSTREETBETS was refused, noting “Reddit is the one providing the online forum, not the applicant.” (See Pranger Decl. Ex. A at 3.) Subsequently, on May 27, 2020, Rogozinski amended his application as to Classes 16 and 38, asserting as the basis for filing, an intent to use the mark. (See Pranger Decl. Ex. B at 2-3.) On August 18, 2020, Reddit filed a notice of opposition with the USPTO's Trademark Trial and Appeal Board (“TTAB”), requesting denial of Rogozinski's application, based on “[p]riority and likelihood of confusion” and “no bona fide intent to use the mark in commerce.” (See Pranger Decl. Ex. H at 3.)
On October 23, 2020, the opposition proceeding was suspended for thirty days to allow for settlement discussions. (See Decl. of James R. Lawrence, III in Supp. of Pl.'s Opp'n (“Lawrence Decl.”), Ex. A at 1.) Ultimately, between October 23, 2020, and November 9, 2022, the opposition proceeding was, at the parties' respective unopposed requests, suspended a total of ten times, for periods ranging between thirty and ninety days, for a total of 600 days, to allow for settlement discussions. (See Lawrence Decl. Ex. A.)
During one of those suspensions, Rogozinski, on January 12, 2022, filed an application to register the mark WSB, “shorthand for WALLSTREETBETS.” (See Compl. ¶ 56.) Reddit did not oppose that registration, which, on June 7, 2022, the USPTO issued as U.S. Trademark Registration No. 6754487. (See Compl. ¶ 56.)
On January 26, 2023, during the tenth suspension of the opposition proceeding, the parties held a settlement conference that did not result in a resolution (see Def.'s Mot. to Stay Claims (“Def.'s Mot.”) at 4:10-12, Dkt. No. 29), after which, on February 15, 2023, the TTAB, upon Reddit's motion, ordered the opposition proceeding to resume and set discovery to close on March 26, 2023, with briefing to close on January 20, 2024 (see Pranger Decl. Ex. M at 2).
On the same day that the TTAB lifted the suspension, February 15, 2023, Rogozinski filed the instant action, asserting claims for (1) “a declaratory judgment that he, and not Reddit, is the owner of the WALLSTREETBETS trademark” (Count I); (2) “infringement of WALLSTREETBETS trademark” in violation of Lanham Act § 43(a), 15 U.S.C. § 1125(a) (Count II); (3) “infringement of registered WSB trademark” in violation of Lanham Act § 32, 15 U.S.C. § 1114 (Count III); (4) “trademark dilution by tarnishment” in violation of Lanham Act § 43(c), 15 U.S.C. § 1125(c) (Count IV); (5) “violation of right of publicity” (Count V); (6) “breach of contract” (Count VI); (7) “violation of duty of good faith and fair dealing” (Count VII); and (8) “unfair competition” in violation of Cal. Bus. & Professions Code § 17200, et seq. (Count VIII). (See Compl. at 20-25.)
Six days later, on February 21, 2023, Rogozinski filed before the TTAB a motion to suspend the opposition proceeding pending the outcome of the instant action, which motion Reddit opposed. (See Pranger Decl. Ex. O.) On April 3, 2023, the TTAB suspended the opposition proceeding “pending the disposition of [Rogozinski's] February 21,2023 motion to suspend proceedings” (see Pranger Decl. Ex. P), and while that motion was pending, Reddit, on April 7, 2023, filed a petition to cancel Rogozinski's WSB mark (see Pranger Decl. Ex. Q). On June 12, 2023, after the reply in support of the instant motion had been filed, the TTAB consolidated the cancellation proceeding with the opposition proceeding, granted Rogozinski's motion, and suspended both proceedings “pending the final disposition of the civil action,” namely, the instant case. (See Pl.'s Statement of Recent Decision, Ex. A (“TTAB Suspension Decision”) at 7.)
LEGAL STANDARD
“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).
In deciding whether to stay proceedings pending resolution of another action, a district court must weigh “the competing interests which will be affected by the granting or refusal to grant a stay,” including (1) “the possible damage which may result from the granting of a stay,” (2) “the hardship or inequity which a party may suffer in being required to go forward,” and (3) “the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.” See Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962)). The proponent of a stay bears the burden of showing such relief is warranted. See Clinton v. Jones, 520 U.S. 681, 708 (1997).
DISCUSSION
By the instant motion, Reddit seeks an order staying Counts I, II, III, and IV (collectively, “Trademark Claims”).
A. TTAB's Suspension
At the outset, the Court addresses the parties' respective positions, as set forth in their supplemental filings, with regard to the effect of the TTAB's recent suspension of proceedings pending resolution of this case. In Tigercat Int'l, Inc. v. Caterpillar Inc., 2018 WL 2049816 (D. Del. May 2, 2018), as Reddit points out, the district court granted a motion to stay despite the TTAB's suspension “pending final disposition of the civil action,” see id. at *2. As Rogozinski notes, however, the TTAB, in suspending its proceeding, stated that if the court granted a stay, “the [TTAB] proceedings [would] resume,” see id., which qualification is absent here (see Pl.'s Opp'n to Def.'s Mot. for Admin. Leave to File Resp. to Pl.'s Statement of Recent Decision at 2:23-26, Dkt. No. 42); see also Georgia-Pac. Consumer Prod., L.P. v. Nextep, Inc., 2010 WL 11595122, at *6 (D. Nev. Mar. 3, 2010) (finding “[i]n light of the TTAB's suspension order, . . . [d]efendants' grounds for requesting the stay,” i.e., “that the TTAB had been litigating th[e] issue for three years and was close to a decision,” were “moot”).
This Court, for purposes of the instant motion, will assume it has the discretion to direct the TTAB to lift the suspension of its proceedings, and, accordingly, next turns to the parties' arguments as set forth in the initial briefing.
B. Stay
1. Damage Resulting from Granting of Stay
The Court begins its analysis with a review of the “possible damage which may result from the granting of a stay.” See Lockyer, 398 F.3d at 1110 (internal quotation and citation omitted). In that regard, Rogozinski argues that “staying this case would harm [him] in at least three ways.” (See Pl.'s Opp'n to Def.'s Mot. to Stay (“Pl.'s Opp'n”) at 11:18, Dkt. No. 32.) The Court considers below each asserted harm.
First, Rogozinski, noting “[t]he TTAB cannot provide . . . any injunctive relief,” argues his “time to relief” will be delayed in that he “would be tasked with litigating the TTAB cases through any appeals[,] . . . pushing the possibility of injunctive relief against Reddit even further into the future.” (See Pl.'s Opp'n at 11:19-25, 12:8); see also Rhoades v. Avon Prod., Inc., 504 F.3d 1151, 1163 (9th Cir. 2007) (holding TTAB, “unlike a federal district court, . . . cannot give relief for an infringement claim, either injunctive or by way of damages” (citing 15 U.S.C. §§ 1063(a), 1064, 1067(a)) (alteration omitted)).
“[C]ourts have relied on delay as a reason to deny a stay where the plaintiff is seeking injunctive relief and a delay of months or years would allow the defendant to continue infringing.” See Aliphcom v. Fitbit, Inc., 154 F.Supp.3d 933, 938 (N.D. Cal. 2015) (citing LG Elecs., Inc. v. Eastman Kodak Co., 2009 WL 1468703, at *2 (S.D. Cal. May 26, 2009)); see also Rhoades, 504 F.3d at 1163 (noting “where an infringement claim is involved . . . there is often some urgency” in that “[o]ngoing business conduct is likely to be involved and harm, possibly irreparable, may be accruing”).
In either forum, of course, prior to any relief being granted, Rogozinski's trademark claims would need to be adjudicated, and, in that regard, Reddit argues, the opposition proceeding “is more than two years advanced, discovery is set to close, and summary judgment looms, which will provide [Rogozinski] with an outcome on his trademark rights sooner than in this Court.” (See Def.'s Reply in Supp. of its Mot. to Stay Claims (“Def.'s Reply”) at 9:3-4, Dkt. No. 36.) Although, as Reddit points out, the opposition proceeding is more than two years along, whereas the instant action was filed four and a half months ago, the opposition proceeding, as noted, was suspended for a combined 600 days to allow for settlement discussions, and consequently, has been active for just under a year. In other words, the TTAB proceeding and the above-titled action are not at markedly different stages of litigation.
Second, Rogozinski argues, he will be harmed by “uncertainty regarding [his] business future.” (See Pl.'s Opp'n at 12:10-11.) To the extent he argues any uncertainty is due to the pendency of the cancellation proceeding (see id. at 12:11-16), however, Rogozinski himself moved to suspend that proceeding, thereby prolonging the uncertainty he claims (see Reddit, Inc. v. Jaime Rogozinski, Cancellation No. 92082038, Respondent's Mot. to Suspend Proc., May 18, 2023).
Third, Rogozinski argues, he will be harmed by the “litigation burden” of “litigat[ing] three separate cases.” (See Pl.'s Opp'n at 12:17-18.) After Rogozinski filed his opposition brief, however, the TTAB, as noted, consolidated the opposition and cancellation proceedings, and, as to the instant case, Rogozinski was the filer and, consequently, is responsible for any increased burden attributable thereto.
Accordingly, the Court finds the first factor weighs neither in favor of nor against a stay.
2. Hardship or Inequity Party May Suffer Absent Stay
The Court next considers “the hardship or inequity which a party may suffer in being required to go forward.” See Lockyer, 398 F.3d at 1110 (internal quotation and citation omitted).
Reddit argues that “if a stay is denied,” it “would be forced to relitigate the same questions related to ownership of the ‘WALLSTREETBETS' mark that it has been litigating in the TTAB proceedings for over two years, and which will be fully adjudicated in the near future,” and that “[t]he Court should not indulge [Rogozinski's] attempt to move the parties' trademark dispute to a new forum, particularly because the TTAB proceedings have progressed to such an advanced stage.” (See Def.'s Mot. at 7:17-22.)
As discussed above, however, and contrary to Reddit's characterization, the TTAB proceedings have not progressed to an “advanced stage.” The opposition proceeding, as noted, had been in suspended status for nearly two-thirds of its existence. Although the parties have conducted some written discovery, no depositions have been taken, no expert discovery has been conducted, discovery has not closed, and no dispositive motions have been filed. In the cases Reddit cites, where courts have found hardship and/or inequity would result absent a stay, the TTAB proceeding was closer to a decision and significantly more work had been performed therein. See Tigercat, 2018 WL 2049816, at *1, *6 (finding “it unacceptable that [plaintiff] decided to invoke the power of the court . . . two months before the start of trial before the TTAB”; noting parties in TTAB proceeding had “produced over 35,000 pages of documents,” had “taken a total of 22 depositions, including seven expert depositions and three third-party depositions,” had produced “consumer surveys . . . and expert advice,” and that “disputes between the parties during the opposition proceedings required intervention by the TTAB and two Federal District Court Judges”); Anstalt v. Bacardi & Co., 2016 WL 7635955, at *4 (C.D. Cal. Nov. 16, 2016) (finding “it would clearly be inequitable for . . . case to proceed” where “[i]t was not until the day before dispositive motions were due [in TTAB proceeding] that [plaintiff] filed its complaint in . . . court”); see also V.V.V. & Sons Edible Oils Ltd. v. Meenakshi Overseas LLC, 2016 WL 1268008, at *6 (E.D. Cal. Mar. 31,2016) (staying action where plaintiff had appealed TTAB's decision to Court of Appeals for Federal Circuit).
Next, Reddit argues, the denial of a stay “will force [Reddit] to reengage in substantial discovery” when “the parties have already exchanged written discovery” in the TTAB proceeding. (See Def.'s Mot. at 8:4-7.) Rogozinski, responding that Reddit “overstates the impact of discovery,” asserts “[t]he same discovery, subject to certain numerical limits on written discovery, will be available to Reddit in this lawsuit.” (See Pl.'s Opp'n at 11:1-2.) Reddit, in its reply, does not address Rogozinski's assertion. Moreover, it is not unusual for parties opposing one another in two separate cases to agree that any discovery provided in one such case will be deemed provided in the other.
Lastly, Reddit argues, “[a]llowing [Rogozinski] to use a new forum to avoid the implications of the positions he has taken in the TTAB proceedings will prejudice Reddit.” (See Def.'s Mot. at 8:19-20.) In particular, Reddit asserts that “facts have already been established or admitted in the TTAB that bear on the [Trademark Claims], at times directly contradicting [Rogozinski's] arguments in his Complaint.” (See Def.'s Mot. at 8:89 (noting Rogozinski, in opposition proceeding, provided verified interrogatory response that a planned “WSB Championship” e-sports trading competition “ha[d] not taken place due to complications caused by the COVID-19 global pandemic,” whereas in the instant Complaint, Rogozinski pleaded that, as a “consequence of Reddit's ban[ning]” him as moderator, his “company lost its contract for the e-sports trading competition in Texas, costing him millions of dollars” (citing Pranger Decl. Ex. R at 12; Compl. ¶ 58)).) Any such arguable inconsistencies, however, can, if relevant, be brought out and argued in either action, and, consequently, Reddit fails to show it would suffer hardship or inequity in that regard.
Accordingly, the Court finds the second factor weighs neither in favor of nor against a stay.
3. Orderly Course of Justice
Lastly, the Court considers “the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.” See Lockyer, 398 F.3d at 1110 (internal quotation and citation omitted). “The deciding factor should be efficiency.” See Rhoades, 504 F.3d at 1165.
Here, Reddit argues, “staying the [Trademark Claims] in favor of their adjudication before the TTAB will . . . simplify the issues before this Court because of the preclusive effect of a ruling in the TTAB.” (See Def.'s Reply at 2:17-19); see also B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 141-42 (2015) (holding “a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met”). In support thereof, Reddit asserts that Rogozinski, by failing to respond to Reddit's discovery requests in the opposition proceeding, is “deem[ed] . . . to have admitted that ‘the use of WALLSTREETBETS as the name of the subreddit r/wallstreetbets is use by Reddit, not by [Rogozinski],'” and that consequently, he “cannot establish priority over Reddit's use.” (See Def.'s Mot. at 6:21-25 (quoting Reddit, Inc. v. Jaime Rogozinski, Opposition No. 91264289, Opposer's First Set of Requests for Admission to Applicant at 7, Dec. 11, 2020).)
In response, Rogozinski argues Reddit's assertion is “an overstatement,” in that his admission is “not equivalent to conceding priority of trademark use.” (See Pl.'s Opp'n at 8:5, 8:22-25.) More importantly, as Rogozinski argues, and as to which Reddit makes no response, any TTAB determination based on the deemed admission would not have preclusive effect. See In re Pizante, 186 B.R. 484, 489-90 (B.A.P. 9th Cir. 1995), aff'd, 107 F.3d 878 (9th Cir. 1997) (affirming denial of collateral estoppel where “judgment was based on [party's] failure to respond to discovery requests”; holding “where issues are deemed admitted due to a party's failure to comply with discovery requests, the ‘actually litigated' element of collateral estoppel is unsatisfied”); see also Restatement (Second) of Judgments § 27, p. 250 (1980) (stating issue must be “actually litigated” for collateral estoppel to apply).
Moreover, as the Ninth Circuit has noted, “where the district court action involves only the issue of whether a mark is entitled to registration, it might make more sense to resolve the registration claims at the TTAB first,” see Rhoades, 504 F.3d at 1165 (internal quotation and citation omitted), and here, by contrast, Rogozinski brings claims over which the TTAB lacks jurisdiction, see 6 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 32:48 (5th ed. 2023) (noting TTAB has jurisdiction “only . . . to decide questions concerning the registration of marks”). Indeed, the TTAB, in suspending proceedings pending the final disposition of the instant action, noted the instant action “involves claims over which the District Court, rather than the [TTAB], has jurisdiction.” (See TTAB Suspension Decision at 6 (stating TTAB “is not authorized to determine the right to use, nor may it decide broader questions of infringement or unfair competition”).)
The Court further notes that not all of Rogozinski's other claims are derivative of his Trademark Claims.
Given the above circumstances, the Court finds judicial economy is better served by denying a stay, and, accordingly, finds the third, and, in this instance, deciding, factor weighs against a stay.
CONCLUSION
For the reasons stated above, Reddit's Motion to Stay is hereby DENIED.
IT IS SO ORDERED.