Opinion ID: 803235
Heading Depth: 7
Heading Rank: 1

Heading: “Strength of the Mark” and “Similarity of the

Text: Marks” The District Court recognized that the strength of a mark depends, at least in part, on where it falls on a spectrum ranging from the “arbitrary” to the “generic.” See, e.g., Surfvivor, 406 F.3d at 631-32. An arbitrary mark consists of “common words that have no connection with the actual product.” Id. (citing Dreamwerks, 142 F.3d at 1130 n.7). On the other hand, the less protected “suggestive” category requires the exercise of some imagination to associate the mark with the good or service. See, e.g., id. at 632. The District Court properly characterized “Rearden” as a “suggestive” mark. Contrary to Appellants’ claim that the mark is “arbitrary” in nature, it takes only a small exercise of imagination to associate this name, made famous in the business community (and elsewhere) as an image or paragon of entrepreneurial success by Rand’s highly successful and influential novel, with the incubation of start-up enterprises: “[A]t a small distance of miles, the words of a neon sign stood written on the blackness of the sky: REARDEN STEEL. . . . [Hank Rearden] thought that in the darkness of this night other signs were lighted over the country: Rearden Ore—Rearden Coal—Rearden Limestone. He thought of the days behind him. He wished it were possible to light a neon sign above them, saying: Rearden Life.” Rearden I, 597 F. Supp. 2d at 1019 (alteration in original) (quoting Ayn Rand, Atlas Shrugged 37 (Signet 1992)). The District Court also appropriately rejected Rearden Commerce’s argument that Appellants’ marks are especially 7634 REARDEN LLC v. REARDEN COMMERCE, INC. weak because over 840 other companies use the word “Rearden,” or some variation thereof, in their respective names. Only four of these entities identify themselves as technology or engineering firms, and each of these four companies has headquarters outside of California, lacks an Internet presence, and employs fewer than five people. See, e.g., M2 Software, Inc. v. Madacy Ent., 421 F.3d 1073, 1087-88 (9th Cir. 2005) (indicating that district court properly excluded evidence of unrelated third party marks). [10] According to the District Court, the “Rearden” mark is “relatively strong,” and this Sleekcraft factor thereby weighs “somewhat in favor of finding a likelihood of confusion.” Rearden I, 597 F. Supp. 2d at 1020. A reasonable finder of fact could accord more significant weight to this factor than did the District Court, particularly in light of evidence that Appellants have undertaken efforts to promote the mark in association with their services; we have observed that “ ‘advertising expenditures can transform a suggestive mark into a strong mark.’ ” Fortune, 618 F.3d at 1034 (quoting Brookfield, 174 F.3d at 1058); see, e.g., id. at 1034-35 (“Here, Fortune proffered evidence indicating that it spends approximately $350,000 yearly marketing its footwear and that it sold 12,000,000 pairs of DELICIOUS shoes from 2005 to 2007. In addition, Fortune has advertised its DELICIOUS footwear in a variety of popular magazines . . . . Whatever its ultimate force, this evidence is sufficient to make the relative commercial strength of the DELICIOUS mark a question for the jury.”). Turning to the related “similarity of the marks” factor, the District Court appropriately looked to sight, sound, and meaning and recognized that any similarities weigh more heavily than differences. See, e.g., Sleekcraft, 599 F.2d at 351. While it properly observed that no ordinarily prudent consumer could be confused by the parties’ very different logos, it highlighted the apparent similarities between the names themselves. It therefore noted the prominence of the word REARDEN LLC v. REARDEN COMMERCE, INC. 7635 “Rearden” and the fact that, like “Rearden Commerce,” many of Appellants’ own names consist of just two words (excluding the corporate identifiers). The District Court also observed elsewhere in its initial summary judgment decision that Rearden Commerce has often referred to itself simply as “Rearden.” See, e.g., Entrepreneur, 279 F.3d at 1144 (stating that marks should be considered as they appear in marketplace). In the end, the District Court acknowledged that this factor weighs “somewhat” in favor of a “likelihood of confusion” finding. Rearden I, 597 F. Supp. 2d at 1023. [11] A reasonable juror could conclude that the “strength of the marks” and “similarity of the marks” factors weigh more than just “somewhat” in favor of finding a likelihood of confusion. Granted, it is common for multiple companies offering different goods and services to use similar names and marks (the District Court provided as an example the fact that several well-known companies share the name “Johnson” (Johnson & Johnson, Johnson Publications, Howard Johnson’s, Johnson Controls, Johnson Products, and S.C. Johnson)). However, a reasonable jury could still determine that this factor weighs significantly in Appellants’ favor. We further note that the District Court did not address the possible cumulative effect of its determinations regarding the “strength of the mark” and “similarity of the marks” factors. See, e.g., Entrepreneur, 279 F.3d at 1145 n.9 (stating inter alia that, “if the trademark holder’s mark were strong, the fact that a consumer would likely notice the difference between two marks might not suffice for a finding that the marks are dissimilar”).