On Nov. 28, 2017, the Court of Appeals for the Sixth Circuit issued its opinion in Signature Mgmt. Team, LLC v. Doe, 876 F.3d 831 (6th Cir. 2017). The case involved a John Doe defendant’s effort to remain anonymous even after having been adjudicated liable for copyright infringement of plaintiff’s business training manual. John Doe argued that anonymity should be maintained since he offered protected speech under the First Amendment concomitant to infringing speech, even though plaintiff’s competing interest in enforcing its remedy would arguably be impeded. The instant case was not sui generis insofar as it concerned a John Doe defendant seeking to maintain anonymity based on Internet speech; these issues have been a hallmark of the Internet journalism age. However, the Sixth Circuit did break new ground in determining the limit of anonymity for copyright infringement post-judgment.
In an issue of first impression, the Sixth Circuit held that a presumption existed in favor of unmasking anonymous defendants post-judgment, a presumption that should be applied in tandem with the separate presumption in favor of open judicial proceedings. Accordingly, the district court’s reliance on a balancing test governing the unmasking of anonymous defendants pre-judgment, i.e., in the discovery phase, was insufficiently tilted toward the presumption of open judicial records (to maintain society’s faith in the judiciary) and the need for the non-infringer to enforce its remedy. Accordingly, the Sixth Circuit reversed and remanded to the district court to apply the new test.
A dissent likened the majority to Doe’s “overprotective parent” and principally argued that Doe’s infringing speech was categorically excluded from First Amendment protections, so no balancing was warranted. The majority acknowledged that Doe’s infringing speech was unprotected, but instructed the district court to determine whether the infringing speech occurred in the context of his anonymous blog activities, which constituted protected speech. Important to the majority was that Doe had ceased any infringing activity by destroying all copies of the work in his possession, so the district court needed to determine whether unmasking him was warranted given the absence of plaintiff’s ongoing injunctive relief.
Obviously the impact of the decision remains unknown. Although the new presumption enhances the difficulty of maintaining anonymity post-judgment, in some quarters this decision was viewed as favorable for free speech. Ultimately, the element of the opinion that may be determinative is also the point of most disagreement between the judges: if infringing speech is alongside protected speech, what weight is to be accorded the copyright owner’s interest in unmasking the infringer?
Facts and Procedural Background
Plaintiff/Appellant Signature Management Team (Signature) is a multi-level marketing company selling materials to assist individuals in profiting from their own multi-level marketing business. Defendant/Appellee John Doe (Doe) anonymous runs a blog called “Anthrax” that is critical of multi-level marketing companies and focuses considerably on Signature. In 2013, Doe posted a hyperlink to a downloadable copy of the entire fourth edition of a book copyrighted by Signature (the Work).
Initial Proceedings at the District Court in Michigan
Signature served Doe’s Internet service provider with a take-down notice pursuant to the Digital Millennium Copyright Act (17 U.S.C. §512(h)). Doe promptly removed the hyperlink to the Work. Signature then sued Doe in the District Court for the Eastern District of Michigan (the District Court) alleging one count of copyright infringement. Signature sought only injunctive relief requesting that the district court reveal Doe’s identity, an order instructing Doe to destroy all copies of the Work in his possession, and a permanent injunction ordering Doe to stop all infringing use of the Work. Doe asserted, inter alia, a fair use defense under 17 U.S.C. §107.
Signature’s Motion to Compel Doe’s Unmasking
Signature then moved to compel the unmasking of Doe. The district court granted the motion in part and denied the motion in part on grounds that unveiling Doe’s identity is a “significant and irreversible harm” and that Doe may prevail on his fair-use defense. See, Signature Mgmt. Team, LLC v. Doe, No. 5:13-14005, Dkt. 48 (E.D. Mich. Nov. 4, 2015). The district court applied the balancing test set forth in Art of Living Found. v. Does 1-10, No. 10-CV-05022, 2011 WL 5446622 (N.D. Cal. Nov. 9, 2011), a case concerning an organization seeking to unmask anonymous bloggers. The Art of Living test involves two steps: 1) [t]he plaintiff must produce competent evidence supporting a finding of each fact that is essential to a given cause of action; and 2) if the plaintiff makes a sufficient evidentiary showing, the court must compare the magnitude of the harms that would be caused to the competing interests by a ruling in favor of the plaintiff and by a ruling in favor of the defendant.
Although concluding that Signature could not satisfy the Art of Living test, the district court compelled Doe to reveal his identity to the court and to Signature’s attorneys.
The District Court’s Ruling on Summary Judgment
In 2016, the district court then denied Doe’s motion for reconsideration of summary judgment on his copyright infringement claim, but limited Signature’s injunctive relief to an order mandating Doe to destroy all copies of the Work in his possession. See, Signature Mgmt. Team v. Doe, No. 5:13-14005, Dkt. 63 (E.D. Mich. July 22, 2016). It held that unmasking Doe “was unnecessary to ensure that defendant would not engage in future infringement of the Work” and that “defendant has already … complied with the proposed injunctive relief” by destroying all copies of the Work in his possession. As such, “no further injunctive relief is necessary.”
Signature appealed on grounds that: 1) the district court improperly disregarded the strong presumption favoring openness of judicial records; 2) as an adjudicated copyright infringer, Doe’s speech is unprotected by the First Amendment, no matter its purported proximity to protected speech; and 3) injunctions must enter in the name of the enjoined party.
A More Stringent Balancing Test Favoring Unmasking Anonymous Speakers
Background First Amendment Speech Principles
An author’s decision to maintain anonymity is protected speech under the First Amendment, including when the speaker believes the espoused ideas will be more persuasive if readers are unaware of his or her identity. Internet speech receives the same First Amendment speech as other speech, even if anonymous. See, Reno v. ACLU, 521 U.S. 844 (1997). With what the Sixth Circuit deemed as the “explosion” of anonymous Internet speech (a reasonable position if one peruses the comments of any news website), courts are in the initial stages of developing balancing tests weighing “the First Amendment right to anonymous speech against a plaintiff’s interest in unmasking an anonymous defendant.” See also, In re Anonymous Online Speakers, 661 F.3d 1168 (9th Cir. 2011) (compiling various formulations of the balancing tests).
The Sixth Circuit then noted the critical distinction between the instant case and its relevant predecessors: “[a]ll of these cases have dealt with anonymity rights during the discovery process. No case has presented the issue here — whether and under what circumstances a court can protect a party’s anonymity after judgment.” This is an important distinction, as the balancing tests often deal with whether to unmask a defendant in order to serve process or to prevent unmasking “potentially nonliable defendants.” However, since Doe has fully complied with the injunctive relief granted to Signature — the destruction of all copies of the Work — there is “no practical need to unmask” Doe, at least prior to reevaluation of the case in light of the new presumption.
The Presumption in Favor of Open Judicial Records
Two presumptions were critical to deciding the appeal. First, there is a strong presumption favoring open judicial records as a means of increasing public confidence and understanding of the judicial system. See, In re Knoxville News-Sentinel Co., Inc., 723 F.2d 470, 476 (6th Cir. 1983) (“Only the most compelling reasons can justify non-disclosure of judicial records.”); see also, Shape Grp., Inc. v. Blue Cross Blue Shield of Mich,, 825 F.3d 299, 305 (6th Cir. 2016) (even if there is a compelling reason for non-disclosure, it must be narrowly tailored). Consequently, the district court had to lay out specific reasons to keep Doe’s identity confidential; these reasons frequently pertain to the maxim that “the greater the public interest in the litigation’s subject matter, the greater the showing necessary when there is a compelling reason not to disclose the access.” Conversely, the burden of the party seeking non-disclosure lessens in the event there is minimal public interest in learning the non-public information.
The Sixth Circuit Announces a New Presumption in favor of Unmasking Anonymous Defendants Post-Judgment
Second, in what the court deemed an issue of first impression, it held that “like the presumption of open judicial records, there is a presumption in favor of unmasking anonymous defendants when judgment has been entered for a plaintiff.” The justification for this presumption is in part that plaintiff’s interest lessens insofar as it assists in enforcing a remedy and not, for example, facilitating service of process. When applying the presumption to copyright infringement, a court should utilize a fact-specific inquiry to consider the reach of the copyrighted material, the economic loss of the holder, the reach of the infringed version of the copyrighted material, and the intent of the infringer.
The need to enforce the remedy also influences the balance in favor of or against unmasking. The court offered enforcement rights for an ongoing remedy such as a permanent injunction (inapplicable to the instant case) as a situation that engenders a strong interest in unmasking. On the other hand, a plaintiff has little need to unmask a Doe defendant who willingly participated in the litigation and complied with all ordered relief.
Finally, a defendant can rebut the openness presumption by showing that he takes part in “substantial” protected speech sufficient to tip the balance in favor of non-disclosure. As a threshold issue, given that Doe’s speech is infringing and beyond the protection of the First Amendment, Doe must show that he participated in a significant amount of other non-infringing speech that would be chilled if his identity was revealed.
On the Merits, the Sixth Circuit Refuses to Unmask Doe’s Identity, and Instead Reverses and Remands to the District Court for Reevaluation in Light of New Presumption
In light of the new presumption, the Sixth Circuit reversed and remanded to the district court because the Art of Living test, used in its previous orders, was now inapplicable to post-judgment enforcement proceedings. The appeals court held that, over a dissenting opinion (discussed below), the district court “failed to recognize that very different considerations apply at the judgment stage than at the discovery stage, and that there is a strong presumption in favor of openness as to court records.” (internal quotations and citation omitted). As a result, the district court should “weigh the factors favoring anonymity against the public’s interest in open proceedings in general and in this particular copyright lawsuit, as well as [Signature’s] interest in unmasking Doe.”
The Dissent Excludes Doe’s Infringing Speech from the Purview of the New Balancing Test
The dissent argued that the case dealt not with sealing of court records, but the concealment of the identity of an adjudged copyright infringer. In these circumstances, whether unmasking Doe will harm his ability to engage in anonymous speech in the future is “collateral,” since Doe’s infringing speech is per se unprotected, rendering the new balancing test inapplicable. The dissent also rejected the majority’s claim that since Doe had complied with the relief granted — the destruction of all copies of the Work in his possession — the “practical need” to unmask him was obviated. The dissent found no legal authority allowing an adjudicated copyright infringer to remain anonymous post-judgment if the infringer made protected speech in proximity to the infringing speech, though this was not unexpected given that the case concerned an issue of first impression.
The case will likely soon be back at the district court to apply the presumption established by the Sixth Circuit and reconsider whether to unmask Doe. The opinion has yet to be cited by another court. However, the case remains in the Sixth Circuit, as on Dec. 12, 2017, Signature petitioned for an en banc rehearing, which remains pending.
***** Richard Raysman is a Partner and Elliot A. Magruder is a staff attorney in the New York office of Holland & Knight LLP.
The views expressed in the article are those of the authors and not necessarily the views of their clients or other attorneys in their firm.