Showdown at the Second Circuit on the Standards Protecting Onine Anonymity

by Paul Alan Levy

An important case about anonymous online speech is hurtling toward a decision in the Second Circuit. The situation is worrisome because defendants are so unsympathetic and the plaintiff’s legal claims seem to me very strong. The danger is that the trial judge’s dismissive treatment of the right to speak anonymously could be addressed in a way that has serious implications for more legitimate speakers.

Everytown for Gun Safety Sues Gun Rights Activists for Trademark Infringement

The case arises from a dispute between advocates of broad access to firearms through the device of 3D printing of guns and the gun-safety policy group Everytown for Gun Safety Action Fund as well as its subsidiary Moms Demand Action. The groups strongly oppose the 3D printing of guns, which they see as a serious threat to safety and as an evasion of sensible gun regulation.

For the apparent purpose of expressing their contempt for Everytown and its affiliated group, some pseudonymous Internet users created instructions for the 3D printing of guns that were emblazoned with the Everytown and Moms Demand Action names, and in the precise contours of their respective logos, and uploaded them to a paid subscription site called Defcad. Then, other similar pseudonyms were used to tweet images of the printed guns; the tweets were directed among other places to Everytown.

It is fair to read the tweets as essentially bragging about the guns with the logos, taunting Everytown about how its logo was being used, and suggesting that there is nothing that Everytown can do about the 3D printing of guns even if the guns are emblazoned with its own logos

So, Everytown undertook to do something about it.  After its demands for removal were ignored, Everytown filed suit in the Southern District of New York against Defcad, against one named individual, and against six pseudonymous defendants, alleging trademark infringement under the Lanham Act and trademark dilution under New York law. On the same day as suit was filed, Everytown moved for a preliminary injunction and for early discovery, seeking to identify the anonymous defendants. At the end of its lengthy brief explaining the basis for the requested preliminary injunction, plaintiffs tagged on a section, less than a page long, which cited several cases allegedly standing for the proposition that “Good cause for expedited discovery exists when, among other things, the true identities of the defendants are unknown, the moving party alleges infringement, the scope of the discovery sought is narrow, and expedited discovery would substantially contribute to moving the case forward.” It appears that no notice was given to the anonymous users; two weeks later, on November 5, 2021, the district judge signed an order to show cause in substantially the form suggested by plaintiff, setting a preliminary injunction hearing for December 2, 2021, along with a briefing schedule, and ordering defendant Defcad to provide identifying information for all of the anonymous defendants.

Later that day, attorney Daniel Schmutter submitted a letter on behalf of Defcad urging a stay of the discovery order, citing the First Amendment right of the anonymous defendants to speak anonymously, and citing several decisions, including Sony Music v. Does and Dendrite International v Doe 3. Four days later, on November 9, counsel submitted a short brief, stating that he was now appearing on behalf of five of the anonymous defendants as well as Defcad. The brief contended that discovery had been improperly ordered without any effort to notify them of the pending motion so that could appear tot defend their right to speak anonymously. He also argued that his clients could counter the contention that there was a likelihood that their use of the marks could create confusion and that, in any event, the marks had been used as an obvious parody.

Later on November 9, Judge Gardephe denied the motion for a stay. He began by stating that the ex parte nature of his original order was well founded because “such relief is routinely granted where a party seeks injunctive relief in a trademark infringement case against unidentified parties.” Second, he refused to allow Defcad to assert the First Amendment rights of its users. Finally, he said that his order that the anonymous defendants be identified was correct, standing and ex parte issues aside, because plaintiffs had alleged infringement of intellectual property rights and, in other cases such as Sony Music v Does and Arista Records v. Doe, routinely ordered identification of anonymous Internet users based only on allegations of IP infringement.

Defcad and the anonymous defendants then submitted an Emergency Motion for an Appellate Stay making their First Amendment arguments at greater length, asserting the First Amendment right to anonymity as well as the right to be heard on that issue which the trial judge had flagrantly violated, but not explaining in any detail how they could justify the use of Everytown’s mark as a parody. The argument on the merits of their trademark defenses is limited to a page and a half of argument buried in the middle of a 25 page brief, contending their their defenses raise “serious questions on the merits of Plaintiff’s underlying theories.” They also note that plaintiff had not identified any incidents of actual confusion, a point that is weakened by the fact that the Everytown-branded guns have been available for such a short time, and that they could not be sued in New York or under New York trademark law because they had carefully forbidden distribution into New York. Everytown opposed the appellate stay, arguing that the right to speak anonymously can be overcome by mere allegations of intellectual property infringement, and distinguishing cases that require evidence to support allegations on the ground that those were not intellectual property cases. Everytown also argued that, in any event, it had submitted affidavits showing an evidentiary basis for its allegations of infringement. Everytown also presented what strikes me as a very strong argument that, considered in light of the evidence it submitted, it has a strong claim for trademark infringement.

The Second Circuit promptly issued an administrative stay and has set the matter for consideration by a motions panel on Tuesday, November 23. Meanwhile, the Electronic Frontier Foundation has filed an excellent amicus brief pointing out that in cases of expressive speech, courts across the country routinely give anonymous defendants an opportunity to defend their anonymity before ordering discovery and further require not just allegations that speech is wrongful but evidence supporting those allegations. The brief doe not address the question whether plaintiffs have sound claims for trademark infringement or dilution, and whether defendants have a valid parody defense, as does its blog post about the brief.

The Two Different Kinds of Standards for Identifying Anonymous Defendants Sued Over Their Speech

As EFF points out, the Dendrite test for deciding whether a plaintiff can compel the identification of anonymous speakers who are being sued based on the contention that their speech is actionable, which has been adopted in one form or another in twelve states as well as many federal courts, stands as an important bulwark against plaintiffs who want to out their critics for some ulterior purpose, but without having any realistic chance of success in the litigation. The test begins with notice to the anonymous users, and then a pause in the process to give the anonymous speakers time to find counsel and to respond, if they desire (and can afford) to do so. Then the plaintiff has the burden of (1) being specific about the words claimed to be actionable, and about the legal claims that supposedly make the speech actionable, (2) showing that the legal claims are valid, timely, and within the court’s personal and subject matter jurisdiction, and (3) presenting evidence sufficient to withstand a motion for summary judgment (or similar standard) supports its claims. Many courts also apply a final stage to the analysis, balancing the relevant interests to decide whether it is equitable to remove the anonymity considering all of the circumstances. Courts in some states reject this final balancing stage.

The test cited by the district judge, and defended by Everytown on appeal, is a very different one, and it comes out of very different circumstances. Sony Music v. Does, decided in 2004, was one of the very earliest cases in which recording companies filed suit against large numbers of anonymous Internet users who were using file-sharing systems to obtain and redistribute copyrighted musical recordings. I bear some responsibility for the existence of this test because, along with EFF and the ACLU, we filed an amicus brief arguing that the infringements at issue in that case were claimed to violate the distribution and display rights, and that both distribution and display are “speech.” So, we contended, the courts should recognize the existence of a free speech interest in displaying a list of favored songs on the Internet. Judge Denny Chin, then a judge in the Southern District of New York, agreed there was something of a free speech right implicated, but, he said, not much of one, and so instead of using the Dendrite test that we proposed to him, requiring notice and a prima facie showing on the merits, he invented a different test, considering the following factors “(1) a concrete showing of a prima facie claim of actionable harm (2) specificity of the discovery request; (3) the absence of alternative means to obtain the subpoenaed information; (4) a central need for the subpoenaed information to advance the claim; and (5) the party’s expectation of privacy.”

A few years later, in another mass downloading case, Arista Records v. Doe, the Court of Appeals for the Second Circuit approved the use of the Sony Music test and held that, given the allegation of the complaint as well as the detailed affidavits showing the infringement, that test has been satisfied (without any discussion of factors two through five). The court of appeals reserved the question whether disclosure could be ordered without supporting affidavits. But in subsequent mass-downloading cases, the copyright owners routinely supply affidavits identifying the copyrighted songs or films and how they ascertained that the materials made available for download; hence the plaintiffs in these case treat the Sony Music test as requiring evidence, and so do the courts. Indeed, the absence of sufficient evidence sometimes defeats efforts for identification of alleged downloaders.

In theory, because this is a multi-factor test, the plaintiff might have a weak showing on the merits of its claim and still secure removal of anonymity because the other factors weigh in its favor, just as, for example, under the sliding scale test for a preliminary injunction, a plaintiff who has a strong balance of the equities can get a restraining order simply by showing that he has presented ”serious questions going to the merits.” But it would be a terrible idea for courts to routinely deny the right to speak anonymously whenever a plaintiff claiming to have a legal claim against the speaker can show no more than “serious questions going to the merits” of its claims. And, in our experience, the second, third, fourth and fifth Sony Music factors, at least in the way in which they are typically applied in mass-downloading cases involving copyrighted sound recordings or movies, always tend to be resolved in favor of the plaintiff. In this way, as the EFF amicus brief argues, the four additional factors work as a “one-way ratchet” in the direction of disclosure.

That is why it has been something of a relief that, although the Sony Music standard has gained fairly widespread acceptance in federal courts across the country considering motions for early discovery to identify alleged copyright infringement in the mass downloading context, not a single one of the more than 350 cases in which the standard has been cited and followed was anything other than a mass downloading case—except in the Second Circuit! The standard followed everywhere else is the Dendrite standard or one of its variants. Such standards are routinely applied in trademark cases (the majority of the trademark cases mentioned in the EFF brief on this subject are cases that we handled here at Public Citizen). It is even applied in some copyright cases that do not involve downloading, where there is reason to believe that the alleged infringement was committed in the course of commenting on the copyright holder, and that the reason for the litigation is a desire to punish the critics, as in Art of Living v. Does in the Northern District of California, and Signature Management Team v. Does in the Sixth Circuit.

In the Second Circuit, however, a handful of trial court decisions have applied the Sony Music test to intellectual property cases that do not involve mass downloading and even, in a few cases, to defamation claims. One question that could be decided on this appeal is whether the Sony Music test applies outside of the copyright downloading context. The danger is that the very bad facts in this case may lead the court of appeals to make some bad law that harms defendants whose speech is far more defensible. EFF should be applauded for filing its amicus brief.

The Danger to Protected Speech Posed by This Appeal

The danger of a bad decision is heightened by the fact that, on the face of the complaint and the briefing so far, as well as the supporting affidavits, Everytown appears to have a very strong claim for trademark infringement (and unlike my friends at EFF, I do not hesitate to say so). Applying the standard Polaroid likelihood of confusion factors, it is hard to see how, assuming the veracity of the allegations in the complaint, Everytown would not succeed in obtaining a preliminary injunction and, indeed, a judgment on the merits. EFF is right to point out that the motivation for defendants use of the Everytown mark is to express their contempt for Everytown, but good intentions and policy motives are not enough to protect defendants against an otherwise valid trademark claim.

And although defendants are making a parody argument, it is hard to see how that parody argument could succeed. This case is nothing like, for example, the Louis Vuitton v. Haute Diggity Dog, where a company created a line of dog toys with parody names such as the Chewy Vuitton, Louis Vuitton v. My Other Bag (a case in which I had some involvement), and similar cases cited in the appellate motion for a stay. The parody argument is only asserted in defendants’ briefs, but it is never explained, and defendants’ counsel were unable to explain to me how what their clients did is a parody, even though I have given them several opportunities to do so.

To be sure, my own view is that the Second Circuit has been far too willing to extend trademark law into the regulation of completely noncommercial uses, contrary to decisions we have won in other circuits protecting the right to make wholly noncommercial uses of marks for the purpose of criticism, but this case IS pending in the Second Circuit, so the defendants are stuck with Second Circuit law on this issue. And, in any event, users must pay a subscription fee to gain access to the downloading printing instructions on Defcad.

Even so, however, the case cannot be affirmed based on the supporting affidavits, even though those affidavits tend to confirm the allegations in the complaint (including proof that the allegedly infringing products are freely available to users seeking to download them in New York, assuming that this matters) because the district judge refused to consider them, but looked only to the allegations in the complaint. Moreover, the affidavits could not be a proper basis for affirmance on alternate grounds because the district judge did not ensure that the anonymous defendants had notice of the impending motion to identify then as well as having enough time to submit argument as well as their own evidence bearing on the validity of the trademark claims. Indeed, the decision cannot be sustained based on the Sony Music factors because the trial judge did not give those factors even the most cursory consideration after ruling that mere allegations of trademark infringement are enough. He just cited the case without even acknowledging that there are five factors! The plaintiff has invoked the abuse of discretion standard to defend the order for discovery and the denial of a stay pending appeal, but its win cannot be sustained under that standard on grounds that the court deliberately chose not to consider.

Consequently, reversal is required, and the question is, on what grounds? What reasons will the court of appeals give when it sends the case back for further consideration? We can hope that the EFF amicus brief will persuade the court of appeals not to endorse for Sony Music test in sending the case back to Judge Gardephe. It seems quite likely, however, based on the record as it stands, that the order compelling disclosure of the identifies of the anonymous defendants, will be confirmed on remand regardless of the test that is deemed applicable. But giving notice and an opportunity to defend anonymity, and applying the right test, matter even when the plaintiff appears to have a strong claim. It remains to be seen what evidence and argument defendants can offer to counter the plaintiff’s showing

Could the Collision Be Avoided?

There could have been a way to avoid all of these questions, had it not been for a tactical error by the plaintiff, compounded by a careless mistake by the Second Circuit in granting a stay pending appeal. Under the trial court’s order to show cause, the case was set for a preliminary injunction hearing on December 2, and defendants’ opposition papers were to be filed by November 11; at defendant’s request, that deadline was extended until November 19. As a result, the serious weaknesses in defendants’ trademark arguments stood to be exposed, and it seems likely that the trial court would have found a likelihood of success on the merits by December 2. And having made such findings based on the consideration of evidence and a weighing of the equities, the argument for identifying the anonymous defendants, even on the Dendrite standard, would have become compelling.

But plaintiff sought early discovery in the same motion in which it sought a preliminary injunction, and it included a paragraph granting early discovery in its proposed order to show cause why a preliminary injunction should not be granted. Judge Gardephe largely followed Everytown’s proposed order when he issued his order to show cause, including the setting of a hearing date for the motion for a preliminary and briefing deadlines leading up to the hearing, and the order for early discovery was an additional paragraph of that order. But when the court of appeals issued its administrative stay, the order provided that “the November 5 order” was stayed, and not just the paragraph allowing early discovery. Even though defendants’ only argument for a stay was that the First Amendment protected their right to remain anonymous, and that they ought to have a fair opportunity to make arguments in support of their anonymity, defendants have taken advantage of the wording of the stay to declare themselves relieved of any obligation to file an opposition to the motion for a preliminary injunction. With the Thanksgiving holidays beginning the day after the appellate stay motion is set to be heard, defendants will likely not have to justify their position on the merits for quite some time, and assuming that plaintiff then gets time to file a reply brief, and that an evidentiary hearing could be required if the evidence conflicts, a ruling on the motion for a preliminary injunction may well be postponed for weeks.

Closing note

As I have made clear, I see the plaintiff in this case as having a strong position on the merits. Even as a civil liberties type as well as a cyberlawyer who defends free speech interests against excessive intellectual property claims, I consider it quite likely that, after defendants are given the fair chance to defend themselves that they deserve, they are going to be identified and enjoined. But I am sorry to have found that the Marcella Ballard lead counsel for Everytown, is not acting like someone who is representing the good guys in the litigation.

When I was considering whether we should file an amicus brief in the Second Circuit, arguing among other things that plaintiff has strong trademark claims, Everytown’s counsel did not return my phone calls or respond to my emails, unlike counsel for defendants who were quick to respond. The EFF motion for leave to file as amicus curiae represents that Everytown’s “counsel did not respond to multiple email messages and phone calls seeking its client’s position on the filing of EFF’s brief.” Ballard has not answered my email asking whether this representation is accurate. Likewise, filings by defendants represent that counsel made repeated efforts to communicate with Everytown’s counsel about various issues, including scheduling, and indicate that plaintiffs’ counsel never respond. The plaintiff and its counsel may well feel that they are litigating against the devil, but the litigation process works more smoothly when lawyers for opposing parties talk to each other.

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