Reddit beats lawsuit by WallStreetBets founder
2023.07.11 18:31
© Reuters. Reddit logo is seen in this illustration taken November 7, 2022. REUTERS/Dado Ruvic/Illustration
By Jonathan Stempel
(Reuters) – A U.S. judge on Tuesday dismissed a lawsuit in which the founder of WallStreetBets, which helped ignite investors’ fascination with “meme” stocks, accused Reddit of wrongly banning him from moderating the community and usurping his trademark rights.
Jaime Rogozinski, who founded WallStreetBets in 2012, said Reddit ousted him in April 2020 as a pretext to keep him from controlling a “a famous brand that helped Reddit rise to a $10 billion valuation” by late 2021.
Rogozinski had applied to trademark “WallStreetBets” in March 2020, when the community reached 1 million subscribers. It now has 14 million.
In a 15-page decision, U.S. District Judge Maxine Chesney in San Francisco rejected Rogozinski’s claim that he owns the WallStreetBets trademark because the market associated it with him and he made the brand famous.
She also dismissed Rogozinski’s state law claims related to his ouster, saying either that they were preempted by a federal law that provides “broad immunity” to websites publishing mainly outside content, or that he lacked standing to sue.
Chesney said Rogozinski can try to amend his complaint.
“While we are disappointed with today’s ruling, Mr. Rogozinski remains confident and committed to vindicating his rights,” his lawyer James Lawrence said in an email.
Reddit declined to comment.
It has called Rogozinski’s lawsuit a “transparent attempt to enrich himself,” and said it got involved to prevent consumer confusion, preserve goodwill, and let people in the r/WallStreetBets subreddit decide who should guide it.
Rogozinski was seeking at least $1 million in damages.
Meme stocks gain popularity through discussions, often among inexperienced investors, in online forums including Twitter.
Their popularity often leads to volatile stock prices that do not reflect companies’ fundamentals or financial health.
Prominent meme stocks have included AMC Entertainment (NYSE:) Holdings, GameStop (NYSE:), Koss and the now-bankrupt Bed Bath & Beyond (OTC:).
The case is Rogozinski v Reddit Inc, U.S. District Court, Northern District of California, No. 23-00686.
