Rearden LLC v. Rearden Commerce, Inc.
| Decision Date | 27 January 2009 |
| Docket Number | No. C 06-07367 MHP.,C 06-07367 MHP. |
| Citation | 597 F.Supp.2d 1006 |
| Parties | REARDEN LLC, et al., Plaintiffs, v. REARDEN COMMERCE, INC., Defendant. |
| Court | U.S. District Court — Northern District of California |
Jason A. Yurasek, Perkins Coie LLP, Monty Agarwal, Ronald L. Johnston, Trenton Herbert Norris, Arnold & Porter, Rachel Lena Chanin, San Francisco, CA, David Joseph Perez, Greenberg Traurig LLP, East Palo Alto, CA, Shylah R. Alfonso, Perkins COIE LLP, Seattle, WA, for Plaintiffs.
Daniel Todd McCloskey, David Joseph Perez, Greenberg Traurig, LLP, East Palo Alto, CA, James J. Lukas, Jr., Kevin John O'Shea, Richard Daniel Harris, Greenberg Traurig, LLP, Chicago, IL, for Defendant.
Herbert Harris Finn, Greenberg Traurig, LLP, Chicago, IL, for Plaintiffs/Defendant.
AMENDED1 MEMORANDUM & ORDER
Re: Cross-Motions for Summary Judgment, Evidentiary Motions, and Motions to Seal
On November 30, 2006 plaintiff Rearden LLC and affiliated companies (collectively "the Rearden companies" or "plaintiffs") filed this action against Rearden Commerce, Inc. ("RC" or "defendant"), alleging six causes of action relating to twelve trade names and one trademark all incorporating the word "Rearden." Specifically, plaintiffs allege the following: (1) false designation of origin under section 43(a) of the Lanham Act; (2) illegal cybersquatting under the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C., section 1125(d); (3) common law state trademark infringement; (4) corporate name infringement; (5) false advertising under California Business and Professions Code, section 17500; and (6) unfair competition under California Business and Professions Code, section 17200.
Now before the court are the parties' cross-motions for summary judgment. Plaintiffs move on claims one and four and defendant's affirmative defenses. Defendant moves on plaintiffs' claims one, three, four, five and six. Having considered the parties' arguments and for the reasons stated below, the court enters the following memorandum and order.
Stephan Perlman ("Perlman") founded Rearden Steel, Inc., in 1999 as the first of what became several affiliated Silicon Valley-based companies. Perlman Amended Moving Dec. ¶ 16. Rearden Steel, Inc., was incorporated in California in May 1999. Id., Exh. A. The Rearden companies are technology incubators and artistic project production companies. Id.2 For example, in 2004, the companies incubated Ice Blink Studios LLC, a full-service art and design studio that contributed to the production of several motion pictures, including The Polar Express (2004), Monster House (2005) and War of the Worlds (2005). See Second Amended Complaint at 4-5. The Rearden companies are also credited with the development of the Moxi Media Center, a device for televisions which incorporates Internet connectivity, digital video recording, a DVD player, a music jukebox, and wireless video distribution in one set-top box. Perlman Amended Moving Dec. ¶ 20.
The following chart summarizes the Rearden companies' apparent succession of name changes and incorporations:
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
See id. ¶¶ 5-15.
Today, there are four Rearden entities: (1) Rearden LLC; (2) Rearden Productions LLC; (3) Rearden Studios LLC; and (4) Rearden Properties LLC. Id. ¶ 1, 4, 44. The flagship entity, Rearden LLC, provides the resources necessary to support the ground-up development of new ventures. O'Shea Moving Dec, Exh. 14 at 9-22. Rearden Productions LLC and Rearden Studios LLC specialize in high definition and animated movie production services. Id. Rearden Properties LLC is a property ownership and management company whose sole source of income is the rental of three units in a building at 355 Bryant Street, in San Francisco, to the other Rearden companies. Id.; O'Shea Moving Dec, Exh. 30. The Rearden companies own the following U.S. registered trademark:
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Perlman Amended Moving Dec. ¶ 41. The Rearden companies also filed "intent-to-use" trademark applications for the marks, "Rearden," "Rearden Companies," "Rearden Commerce Email," and "Rearden Personal Email," on May 31, 2007. O'Shea Opp. Dec, Exhs. 15-18.
The Rearden companies have offices in San Francisco and Palo Alto, California. Yurasek Moving Dec, Exh. J at 4; http://www.rearden.com/contact/index.html (last visited Dec. 29, 2008).3 Their combined staff consists of around one hundred employees. Yurasek Moving Dec, Exh. J at 4. The Rearden companies have also continuously operated a host of websites, including: "reardensteel.com" since November 1999; "rearden.com" since April 2001; "reardenstudios.com" since March 2002; and "reardenlabs.com" since May 2005. Perlman Amended Moving Dec. ¶ 46.
As an incubation platform, the Rearden companies provide new ventures with funding as well as management and infrastructure support, including office space, personnel, equipment, information technology infrastructure, insurance, administrative and travel services, benefits, marketing, and intellectual property advice. Id. ¶ 16. In some cases, the companies contract with third parties to provide this support. Id. ¶ 21. For example, a human resources company, TriNet, partners with Rearden to provide online access to payroll and benefits management services, along with internet points of sale for air travel, hotel accommodations, car services, dining reservations, and event tickets. Id.
Rearden Commerce is the Silicon Valley-based creator of a proprietary webbased technology called the "Rearden Personal Assistant." The Rearden Personal Assistant links subscribers, namely professionals and existing businesses, to an online marketplace where they can search for, compare and purchase a variety of business and travel-related services from more than 130,000 venders, such as American Airlines, Hertz, Hilton, and WebEx. O'Shea Moving Dec, Exh. 3 at 3-4. The services are comprehensive and may encompass air and car travel, event tickets, dining reservations, web conferencing, and package shipping. Id. at 3.
Rearden Commerce caters to the needs of traveling business people and employers. As an example, the Rearden Services Console enables managers and administrators of travel, procurement, and other key departments to "implement and enforce policies, manage suppliers and contracts and guide employees to the right service choices at the point of purchase." Id. at 4.
Perlman first learned of Rearden Commerce in 2006 after a trademark watch service notified him that defendant sought registration of the mark "Rearden Commerce" and the logo pictured below. Perlman Amended Moving Dec. ¶ 49; O'Shea Moving Dec, Exh. 5.
This notification came after Rearden Commerce had already filed trademark applications with the U.S. Patent and Trademark Office ("PTO") one year earlier, in March 2005. See O'Shea Moving Dec, Exhs. 4 & 5. Although Rearden contested the applications after it received notice, the PTO nevertheless approved the registration. See PTO Website, http://www.uspto.gov/main/ trademarks.htm (search "Rearden Commerce" using trademark search functionality).
Prior to becoming "Rearden Commerce" in 2005, defendant operated under two other designations. First, defendant chose the name "Gazoo Corporation" in 1999 when Patrick Grady ("Grady") originally founded the company. Two years later, Gazoo changed its name to "Talaris Corporation." See Yurasek Moving Dec, Exh. QQ at 2, Exh. WWW. In 2004, Grady commenced the re-branding of Talaris to "Rearden Commerce." Id., Exh. QQ. Grady described the rationale for the name change as follows:
"Talaris" has never registered with anyone, the name is often mispronounced and it only reflects the `personal assistant' metaphor, not the real overarching value and vision. It is also difficult to build a culture, image and brand from it. Lastly, we haven't built any brand equity as we have stayed largely in stealth mode since '02 ... unlike Talaris which narrowly defines us, `Rearden' Commerce however, is a fundamentally sound symbol/reflection/metaphor for us in every way.
Grady contacted Perlman and asked to purchase the Internet domain "www. rearden.com." Perlman Amended Moving Dec, Exh. LL. Perlman declined Grady's offer and contested Rearden Commerce's trademark registration. Id. ¶¶ 49, 50 Exh. MM. Several days later, Grady and Perlman spoke over the phone; however, the discussions were fruitless and the Rearden companies filed this action. Id.
Summary judgment is proper when the pleadings, discovery, and affidavits show that there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. The party moving for summary judgment bears the burden of identifying those portions of the pleadings, discovery, and affidavits that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On an issue for which the opposing party will have the burden of proof at trial, the moving party need only point out "that there is an absence of evidence to support the nonmoving party's case." Id.
Once the moving party meets its initial burden, the nonmoving party must go beyond the pleadings and, by its own affidavits or discovery, "set forth specific facts showing...
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