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Friday, August 24, 2018

Free speech rights warrant allowing infringing blogger to stay anonymous

By Thomas Long, J.D.

In a copyright infringement dispute between a multi-level marketing company and an anonymous blogger, the federal district court in Detroit has, on remand from the U.S. Court of Appeals in Cincinnati, decided for the second time to grant the blogger’s motion to maintain his anonymity and has refused to unmask the blogger post-judgment. The blogger had been found liable for infringing an edition of the marking company’s textbook and had been ordered to destroy all copies of the book in his possession. On appeal of the district court’s initial refusal to reveal the blogger’s identity, the Sixth Circuit had formulated a balancing test—which weighed the interest of the public in the openness of judicial records, the plaintiff’s interests in obtaining the defendant’s identity, and the defendant’s interest in maintaining anonymity as an aspect of constitutional free speech rights—and remanded with instructions for the district court follow this balancing test in reconsidering its decision not to unmask the defendant. After balancing the relevant factors, the court concluded that Doe’s anonymity should continue to be protected. According to the court, Doe’s interest in maintaining his anonymity outweighed the interests of the public and the plaintiff in learning his identity because unmasking Doe would chill his protected speech, making Doe subject to threats and harassment (Signature Management Team, LLC v. Doe, August 21, 2018, Levy, J.).

Plaintiff Signature Management Team, LLC ("Team") sold materials designed to help customers operate multi-level marketing businesses. The defendant, designated as "John Doe," anonymously ran a blog under the pseudonym "Amthrax," where he criticized multi-level marketing companies, including Team. Doe posted a hyperlink on his blog to a downloadable copy of the entirety of the fourth edition of a book copyrighted by Team, "The Team Builder’s Textbook," a guide to participating in Team’s multi-level marketing business. At the time of the infringement—January 18, 2013—the book was in its ninth edition. After Team served the blog’s host, Automattic, Inc., with a take-down notice under the Digital Millennium Copyright Act, Doe removed the hyperlink to the book.

On September 19, 2013, Team filed suit against Doe for copyright infringement, seeking injunctive relief, including a request that the district court identify Doe. Doe asserted fair use and copyright misuse defenses and contended that he had the right to speak anonymously. In response to Team’s motion to compel discovery of Doe’s identity, the district court declined to unmask Doe at that time because unmasking an anonymous speaker was a significant and irreversible harm, and there was a chance Doe could prevail on the fair use defense. Doe was ordered, however, to reveal his identity to the court and to Team’s attorneys, subject to a protective order.

After discovery, the district court granted summary judgment in favor of Team on its copyright infringement claim, but limited relief to an injunction requiring Doe to destroy all copies of the book in his possession. The district court denied Team’s motion for further injunctive relief, finding that unmasking Doe was unnecessary to ensure that Doe would not engage in future infringement and that Doe had already declared that he had complied with the court’s destruction order. Team appealed the district court’s refusal to unmask Doe. The Sixth Circuit remanded the case with instructions for the court to apply the balancing test set forth by the appellate court to determine whether maintaining Doe’s anonymity was appropriate. After applying that test, the district court again decided not to unmask Doe.

Presumption of openness. The Sixth Circuit had stressed that there was a strong presumption in favor of openness, and that "only the most compelling reasons can justify non-disclosure of judicial records." In the district court’s view, the case at bar presented a somewhat atypical unsealing case that required a slightly different analysis than standard decisions. Unlike "standard unsealing decisions," where courts often decide whether records should be sealed from the public during discovery, the issue here was whether Doe’s identity should be revealed after a judgment had been issued against him, and one of the parties, in addition to the public, was unaware of Doe’s true identity.

There also was a presumption in favor of unmasking anonymous defendants when judgment had been entered in favor of the plaintiff, the court noted. To determine whether unmasking was appropriate, the court had been instructed to weigh the factors favoring anonymity against the public’s interest in open proceedings, as well as Team’s interest in unmasking Doe." The primary factor favoring anonymity was whether the defendant engaged in substantial protected speech that unmasking will chill.

Public interest. With respect to the public interest, the court noted that as a general matter the public had a right to know who the parties were in almost every case as a matter of public confidence in and understanding of the judicial system. However, in the court’s view, the public’s interest in the identity of the defendant in this particular copyright infringement suit was less pronounced than its general interest in open court records. The copyrighted work at issue did not have significant public reach; it was a "sparsely read instruction manual" rather than a bestselling novel. It was an out of date textbook that was aimed at a narrow audience. Doe did not violate the copyright of the work’s current edition. Moreover, Team’s economic losses were insignificant, the court said. In fact, Team did not even choose to seek economic damages. According to Automattic’s statistics, only 49 people had clicked the link to the infringed work on the Amthrax blog. At the time, the fourth edition textbook sold for $1.98.

Doe acted in good faith and without malicious intent throughout the litigation, according to the court. Doe had posted his link nearly a month before Team had registered the copyright in the work, and Doe complied with Team’s pre-litigation takedown notice. In addition, Doe destroyed all copies of the work in his possession six months before Team filed suit. The court previously had declined to issue a permanent injunction because it was unlikely Doe would resume infringement of the work. The case involved a small-time copyright infringer, and revealing Doe’s identity was not likely to have any impact on the rights of any member of the public.

Plaintiff’s interest. Team’s interest in unmasking Doe was not strong, the court said. Doe willingly participated in the litigation and complied with all relief ordered. Doe destroyed all infringing copies, and in the court’s view there was no need to monitor compliance with the judgment because Doe had already complied in full.

Doe’s interest in anonymity. Unmasking Doe would chill Doe’s protected speech on his blog, which was commentary on a matter of public concern. Doe contended that making his identity known would subject him to harassment and threats. This fear was reasonable, the court said, because it was grounded in the experience of another blogger who had criticized multi-level marketing schemes and was subjected to a years-long campaign of intimidation in retaliation for his statements. Accordingly, the court decided that the factors weighed in favor of allowing Doe to remain anonymous.

This case is No. 5:13-cv-14005-JEL-DRG.

Attorneys: Joanne G. Swanson (Kerr, Russell and Weber, PLC) for Signature Management Team, LLC. James E. Stewart (Honigman Miller Schwartz and Cohn LLP) for John Doe.

Companies: Signature Management Team, LLC

MainStory: TopStory Copyright TechnologyInternet MichiganNews

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