Opinion ID: 204909
Heading Depth: 3
Heading Rank: 4

Heading: Remaining Sleekcraft Factors

Text: Strength of the mark is determined with a two-part test. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir.2000). The first part is conceptual strength. See id.; 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 11:83 (4th ed. Supp. 2010). We have already concluded that the district court properly found that VERICHECK is a suggestive mark. The second part is commercial strength, or the marketplace recognition value of the mark. Id. The district court properly considered and rejected Lahoti's argument that the VERICHECK mark was rendered weak by a crowded field of third-party users. The district court examined the three prior uses Lahoti raised, noted that there was no credible evidence that any of them had used the VERICHECK mark to compete with Vericheck, and found that this was a far cry from the multitude of registrations and uses that might suggest a weak mark. In contrast, the district court found that Vericheck had a longstanding use of the mark, promoted it through trade shows and promotional incentives, expanded its territory and client list and increased its sales. The district court's conclusion that the mark is strong is valid. This factor favors Vericheck. Next is evidence of actual confusion. Sleekcraft, 599 F.2d at 352. On this point, two witnesses testified on behalf of Vericheck that there has been significant confusion as a result of the www.vericheck. com website. The evidence shows that Vericheck and its independent sales offices and resellers receive a substantial number of telephone calls from confused customers who could not find information about Vericheck on www.vericheck.com. Lahoti argues, however, that the district court should not have considered the evidence of confusion, because it was hearsay. [4] Though the customers' statements were clearly offered for the truth of the matter, they are permissible under the state of mind exception to the hearsay rule. See Fed.R.Evid. 803(3); Conversive, Inc. v. Conversagent, Inc., 433 F.Supp.2d 1079, 1091 (C.D.Cal.2006) (noting that the majority of circuit courts that have considered this issue have . . . found that such evidence is admissible); 4 McCarthy, supra, § 23:15 (noting that the majority of courts have so found and opining that such testimony is not hearsay). Accordingly, this factor weighs in favor of Vericheck. The district court noted that [n]either party presented evidence regarding the likelihood of expansion, and so this factor is neutral. Also, if a typical consumer of the goods or services at issue exercises a high degree of care in purchasing the kind of good or service at issue, this weighs against finding a likelihood of confusion. Sleekcraft, 599 F.2d at 353. The district court found that [e]xercising an average degree of care, a potential purchaser could conceivably visit instead of and consequently become frustrated or confused by the myriad links found there. That reasoning is valid. See Electropix v. Liberty Livewire Corp., 178 F.Supp.2d 1125, 1134 (C.D.Cal. 2001) (holding that virtually no amount of consumer care can prevent confusion where two entities have the same name). This factor weighs in favor of Vericheck. Finally, we already affirmed the district court's finding that Lahoti acted in a bad faith attempt to profit from his use of the VERICHECK mark. Lahoti, 586 F.3d at 1202-04. This factor, too, weighs in favor of Vericheck.