Signature Management Team, LLC v. Doe

After district court found in plaintiff’s favor in copyright action but refused to unmask defendant, an anonymous blogger, Sixth Circuit, in matter of first impression, holds that presumption in favor of unmasking anonymous defendants when judgment has been entered for plaintiff exists, and remands with instructions for district court to reconsider unmasking defendant.

Signature Management Team LLC, a multilevel marketing company, brought a copyright infringement action against John Doe, an anonymous blogger who wrote critically of multilevel marketing companies, particularly Signature, after Doe posted a link to a downloadable copy of a book to which Signature owned the copyright. During discovery, Signature moved to compel the disclosure of Doe’s identity, but the district court declined, ruling that Doe’s identity be revealed only to the court and to Signature’s attorneys, with a protective order in place that would prevent Signature from learning Doe’s identity. In so ruling, the district court applied the balancing test from Art of Living Found. v. Does 1-10, No. 10-CV-05022, 2011 WL 5444622 (N.D. Cal. Nov. 9, 2011), which was designed “to balance the magnitude of the harms that would be caused to the competing interests by a ruling in favor of plaintiff and by a ruling in favor of defendant” (quotation omitted). Applying the test in the instant case, the district court concluded that unmasking an anonymous speaker is a significant and irreversible harm and, since there was a chance Doe would prevail on his fair-use defense, declined to unmask Doe at that time.

Thereafter, Signature prevailed in the suit on summary judgment and was granted limited injunctive relief requiring Doe to destroy all copies of the copyrighted work in his possession. Doe declared he had complied with the order. The district court denied Signature’s request for further injunctive relief unmasking Doe, finding that it was unnecessary to ensure that Doe would not engage in future infringement of the work, and that Doe had already declared his compliance with the limited injunctive relief awarded. Signature appealed the district court’s refusal to unmask Doe to the Sixth Circuit.

On appeal, the Sixth Circuit acknowledged the First Amendment’s protection of anonymous internet speech, which allows for the robust exchange of ideas without the speaker having to fear retaliation or social ostracism. While courts have begun to develop balancing tests weighing this First Amendment protection of anonymous internet speech against a plaintiff’s interest in unmasking an anonymous defendant, the Sixth Circuit noted that all such cases have dealt with anonymity rights during the discovery process. No case had previously considered the issue presented here — whether and under what circumstances a court can properly protect a party’s anonymity after judgment. The Sixth Circuit recognized that this is an important distinction, because balancing tests applied during the discovery process are designed, in part, to safeguard against unmasking potentially nonliable defendants; the entry of judgment against a Doe defendant largely eliminates those concerns. On the other hand, the Sixth Circuit also recognized that, where the anonymous defendant is determined to have fully complied with the relief granted, there is no practical need for unmasking.

The Sixth Circuit veered from the district court’s analysis, however, pointing to the post-judgment interest in the presumption of openness in judicial proceedings. In an issue of first impression, the Sixth Circuit held that, like the general presumption of open judicial records, there is also a presumption in favor of unmasking anonymous defendants when judgment has been entered for a plaintiff. When deciding whether to unmask an anonymous defendant, the Sixth Circuit held, courts must consider both the public interest in open records and the plaintiff’s need to learn the anonymous defendant’s identity in order to enforce its remedy; the greater a plaintiff’s or the public’s interest in unmasking a losing Doe defendant’s identity, the more difficult it will be for the Doe defendant to overcome the presumption and remain anonymous. Further, where a Doe defendant’s speech is found to be beyond the protection of the First Amendment, countering the presumption will require the Doe defendant to establish that he participates in a significant amount of other noninfringing anonymous speech that would be chilled if his identity were revealed. 

According to the Sixth Circuit, determining the public interest in the disclosure of the identity of an anonymous defendant is a fact-intensive inquiry. For example, the public interest will be greater when the anonymous speech is intentionally libelous, made to a large audience or is regarding a matter of public concern, and weaker where the libelous speech is negligent, is read by few people and arose from a personal feud. In the context of a copyright infringement suit, the Sixth Circuit held, a court should consider the reach of the copyrighted material, the economic loss suffered by the copyright holder, the reach of the infringing material and the infringer’s intent; according to the Sixth Circuit, the public interest would be stronger when the infringed material is a best-selling novel rather than a sparsely read instruction manual. 

The Sixth Circuit also held that the presumption in favor of disclosure is stronger or weaker depending on the plaintiff’s need to unmask the defendant in order to enforce its rights. According to the Sixth Circuit, a court considering the plaintiff’s need to unmask an anonymous defendant should look at the nature of the remedy — for instance, a plaintiff that has been awarded an ongoing remedy such as a permanent injunction will have a strong interest in unmasking, but there is little need to unmask a defendant who has willingly participated in the litigation and complied with all relief ordered. Further, where the public interest is minimal and the Doe defendant’s interest in remaining anonymous substantial, a district court may enter a judgment that conditions a defendant’s continued anonymity on the satisfaction of the judgment within a certain time frame. 

Finally, the Sixth Circuit held that a Doe defendant may rebut the presumption of openness by showing that he engages in substantial protected speech that unmasking will chill. This requires that a district court engage in a fact-specific analysis that balances the extent to which unmasking would infringe on the exercise of legitimate First Amendment rights against the strength of the presumption in favor of unmasking and the plaintiff’s interest in unmasking Doe.

Applying its newly enunciated test, the Sixth Circuit held that while the district court properly considered such factors as the non-necessity of a permanent injunction and Doe’s compliance with all relief ordered, and that the majority of Doe’s anonymous blogging constituted protected speech, the district court failed to recognize that different considerations apply at the judgment stage than at the discovery stage, or the strong presumption in favor of open records. Accordingly, the Sixth Circuit remanded to the district court with instructions to apply the presumption established by its opinion, to weigh the factors favoring anonymity against the public’s interest in open proceedings (in general and in this particular lawsuit) and plaintiff’s interest in unmasking Doe, and to reconsider whether to amend the judgment and unmask Doe’s identity.

Summary prepared by Jonathan Strauss and Kyle Petersen