Rearden LLC v. Rearden Commerce, Inc.

• Decision Date: 27 June 2012
• Docket Number: No. 10–16665.,10–16665.
• Citation: 683 F.3d 1190,12 Cal. Daily Op. Serv. 7291,2012 Daily Journal D.A.R. 8909,103 U.S.P.Q.2d 1161
• Parties: REARDEN LLC; Rearden Productions LLC; Rearden Studios LLC; Rearden Properties LLC, California limited liability companies; Rearden, Inc., a California corporation, Plaintiff–Appellants, v. REARDEN COMMERCE, INC., a California corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

683 F.3d 1190

103 U.S.P.Q.2d 1161

12 Cal. Daily Op. Serv. 7291

2012 Daily Journal D.A.R. 8909

REARDEN LLC; Rearden Productions LLC; Rearden Studios LLC; Rearden Properties LLC, California limited liability companies; Rearden, Inc., a California corporation, Plaintiff–Appellants,

v.REARDEN COMMERCE, INC., a California corporation, Defendant–Appellee.

No. 10–16665.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Dec. 8, 2011.

Filed June 27, 2012.

Deanne E. Maynard (argued), Brian R. Matsui and Adam A. Eltoukhy, Morrison & Foerster LLP, Washington, DC; Douglas L. Hendricks and J. Thomas McCarthy, Morrison & Foerster LLP, San Francisco, CA, for the appellants.

Richard D. Harris (argued), Chicago, IL, for the appellee.

Appeal from the United States District Court for the Northern District of California, San Francisco, Marilyn H. Patel, Senior District Judge, Presiding. D.C. No. 3:06–cv–07367–MHP.

Before: DIARMUID F. O'SCANNLAIN, ROBERT E. COWEN,^* and MARSHA S. BERZON, Circuit Judges.

OPINION

COWEN, Circuit Judge:

Plaintiffs Rearden LLC, Rearden Productions LLC, Rearden Studios LLC, Rearden, Inc., and Rearden Properties LLC appeal from the orders of the United States District Court for the Northern District of California granting summary judgment in favor of Defendant Rearden Commerce, Inc. In two rulings, the District Court granted Rearden Commerce's motions for summary judgment with respect to Appellants' claims under the Lanham Act, the Anticybersquatting Consumer Protection Act (“ACPA”), California's common law of trademark infringement, and the California Unfair Competition Law (“UCL”). Because there are genuine issues of material fact, we vacate and remand for further proceedings consistent with this opinion.

I.

Steve Perlman founded Rearden Steel, Inc. in May 1999. He chose this name, at least in part, because it was a reference to the “Hank Rearden” character from Ayn Rand's novel, Atlas Shrugged. This company changed its name to Rearden Studios, Inc. in March 2002, Rearden, Inc. in October 2004, and, finally, Rearden LLC in June 2006. Rearden LLC was only the first of several Bay Area-based “Rearden” companies started by Perlman. Other Rearden entities include: (1) Rearden Studios LLC (which was originally incorporated as Rearden Steel Entertainment, Inc. in March 2000, and then changed its name to Rearden Entertainment, Inc. in March 2002, Rearden Studios, Inc. in February 2005, and Rearden Studios LLC in June 2006); (2) Rearden Productions LLC (which was incorporated as Look Aside Productions, Inc. in March 2000, changed its name in the same month to Rearden Steel Productions, Inc., and then became Rearden Productions, Inc. in March 2002 and Rearden Productions LLC in June 2006); and (3) Rearden Properties LLC.

Appellants have offices in San Francisco and Palo Alto, and they collectively employ approximately one hundred employees. They also operate a number of websites, including “Rearden.com” (their main website, which has been in operation since April 2001), “ReardenSteel.com” (maintained since November 1999), “ReardenStudios.com” (since March 2002), and “ReardenLabs.com” (since May 2005).

“The Rearden companies are technology incubators and artistic production companies.” Rearden LLC v. Rearden Commerce, Inc., 597 F.Supp.2d 1006, 1012 (N.D.Cal.2009) (“Rearden I ”) (citation omitted). Simply put, an incubator provides resources and support for the ground-up development of start-up ventures. Such resources and support include office space, personnel, equipment, IT infrastructure, funding, credit guarantees, insurance, administrative services, benefits, travel services, marketing, creative ideas, intellectual property, and domain names. In turn, Appellants sometimes contract with third parties in order to provide certain services. For example, they have entered into a partnership with TriNet, a human resources company, to provide their affiliates with online access to payroll and benefits management services as well as the ability to purchase such services as airline, hotel, and dining reservations, car services, and event tickets.

Unlike Rearden Commerce, Appellants generally do not distinguish between the various Rearden entities for the purposes of this lawsuit. The District Court likewise frequently referred to “the Rearden companies” or, simply, to “Rearden.” It also pointed out that Rearden LLC, as the “flagship entity,” actually provides the resources and support for the ground-up development of new ventures. Id. at 1013. On the other hand, Rearden Productions LLC and Rearden Studios LLC specialize in high definition and animated movie production services. Finally, Rearden Properties LLC is a property ownership and management company that rents three units in a San Francisco building to the other Rearden entities.

Appellants own a registered mark in the words “Rearden Studios” as well as in a blue and black logo featuring a prominent figure of an Amazon warrior and the words “REARDEN STUDIOS.” Specifically, the company now known as Rearden LLC originally sought protection from the Patent and Trademark Office (“PTO”) for this mark on April 20, 2002, and registration was ultimately obtained on November 1, 2005. On May 31, 2007, Appellants filed “intent-to-use” applications for the following marks: “Rearden,” “Rearden Companies,” “Rearden Commerce Email,” “Rearden Personal Email,” “Rearden Mobile,” “Rearden Wireless,” and “Rearden Communications.” In addition to alleging that Rearden Commerce has infringed on their “Rearden Studios” mark and name, Appellants claimed that Rearden Commerce has infringed on a large number of other alleged “Rearden” marks and names, including “Rearden,” “Rearden LLC,” “Rearden Productions,” “Rearden Properties,” “Rearden Commerce Email,” “Rearden Companies,” “Rearden Entertainment,” “Rearden, Inc.,” “Rearden Labs,” “Rearden Personal Email,” and “Rearden Steel.” Partly because Rearden Commerce has frequently referred to itself simply as “Rearden,” the District Court (following the example set by Appellants themselves) believed it was appropriate to focus on the word “Rearden,” which appears in each of the Appellants' names.

The alleged infringer, Rearden Commerce, Inc., is a Silicon Valley-based business concierge company. Simply put, it offers a proprietary web-based platform called the “Rearden Personal Assistant,” which links its clients, specifically businesses and professionals, to an online marketplace where they then are able to search for, compare, purchase, and manage a variety of business and travel-related services from more than 130,000 different vendors (including such well-known companies as American Airlines, Hertz, Hilton, and WebEx). The available services include air, car, hotel, and dining reservations, event tickets, web conferencing, and package shipping.

Patrick Grady founded Rearden Commerce as Gazoo Corporation in 1999. He then changed its name to Talaris two years later. Grady also has an affinity for Rand's “Hank Rearden” character. In August 2004, Talaris accordingly reserved the California corporate name “Rearden, Inc.,” but it ultimately lost this reservation to Appellants in October 2004. After reserving the “Rearden Commerce” name in November 2004, Talaris officially changed its name to Rearden Commerce in January 2005. The renamed company then relaunched its main website as “ReardenCommerce.com” in February 2005 (a domain name that Rearden Commerce had obtained in August 2004). On March 4, 2005, it formally filed applications with the PTO for the “Rearden Commerce with logo” and “Rearden Commerce” marks. The red and black logo consists of a stylized letter “R” next to the words “REARDEN commerceTM.” The applications were formally published for opposition on July 4, 2006 and October 31, 2006, and Appellants thereby became aware of Rearden Commerce and its alleged marks.

Rearden Commerce also began to obtain a variety of Internet domain names incorporating the word “Rearden.” ¹ A user accessing one of these domain names is then redirected to the company's primary website. In particular, Rearden Commerce registered the following domain name “families” (e.g., “.com,” “.org”) on March 4, 2005: (1) “ReardenInc”; (2) “ReardenCo”; and (3) “ReardenC.” ²

On October 31, 2006, the same day it agreed to an extension of time for Appellants to file a possible opposition to its applications with the PTO, Rearden Commerce, at the direction of General Counsel Gabriel Sandoval, registered the “ReardenLLC.com” domain name. It then registered the “ReardenLLC.net” domain name on November 6, 2006 and the “ReardenMobile.com” and “MobileRearden.com” names on November 10, 2006. As of December 1, 2006, Rearden Commerce began directing individuals accessing the “ReardenLLC” domain names to its main website.

Appellants, in a letter dated November 7, 2006, informed Rearden Commerce that their research revealed a conflict between the parties' marks and names and accordingly asked for a response by November 17, 2006. According to Appellants, no substantive response was provided, and they filed suit on November 30, 2006.

In their initial complaint, Appellants advanced the following claims against Rearden Commerce: (1) false designation of origin under the Lanham Act, 15 U.S.C. § 1125; (2) common law trademark infringement; (3) violations of the California UCL, Cal. Bus. & Prof.Code § 17200; and (4) false advertising under California law, Cal Bus. & Prof.Code § 17500. Perlman subsequently discovered, among other things, Rearden Commerce's registration of the “Rearden–LLC” domain names as well as the fact that it was directing traffic from these domain names to its main website.

At a mediation session held on June 6, 2007, Appellants demanded that Rearden Commerce cease its alleged cybersquatting. As a supposed sign of good faith, Rearden Commerce ceased directing traffic from the “ReardenLLC” and the “ReardenInc” domain names to its main...