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Lahoti v. VeriCheck, Inc.

United States Court of Appeals for the Ninth Circuit

March 9, 2009, Argued and Submitted, Seattle, Washington; November 16, 2009, Filed

No. 08-35001

Opinion

 [***1642]  [*1193]   GOULD, Circuit Judge:

David Lahoti appeals the district court's bench trial judgment that his use of the "VeriCheck" Georgia state service mark owned by Vericheck, Inc. violated the Anti-Cybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d), the Lanham Act, 15 U.S.C. §§ 1051 et seq., the Washington Consumer Protection Act ("WCPA"), Wash. Rev. Code § 19.86, and various Washington common law doctrines. Lahoti, who has previously been found liable for cybersquatting activities, obtained the domain name "vericheck.com," but did not use the website to offer any goods or services. We conclude that the district court's  [**2] factual decision that the "VeriCheck" mark was a distinctive, legally protectable mark under the ACPA and federal trademark law was based in part on reasoning contrary to federal trademark law and based in part on reasoning that could support the district court's conclusion. Because we believe the district court should decide the issue of distinctiveness in light of the principles we explain, we vacate the district court's opinion and remand for further proceedings not inconsistent with this opinion.

Vericheck, Inc. ("Vericheck") is a Georgia corporation that provides electronic financial transaction processing services, including check verification, check guarantee, check collection, account verification, automated check handling, and payment processing services. Vericheck has advertised itself on its website as "[t]he  [*1194]  leader in Check Verification and Guarantee Services," and check verification underlies a large part of its operations. Vericheck operates a website at vericheck.net and also owns the domain names vericheck.org, vericheck.cc, vericheck.us and vericheck.biz. Vericheck unsuccessfully attempted to secure the vericheck.com domain name (the "Domain Name") from a Canadian  [**3] company in 1999.

In 2001 Vericheck gained a Georgia state registration for its service mark, 1 which consists of a checkmark over the word "VeriCheck" (the "Disputed Mark"). The Georgia registration states that the mark is used in connection with "Check Verification and Check Collection Services." Vericheck tried to obtain federal registration of the Disputed Mark, but in 2003 the United States Patent and Trademark Office ("PTO") denied the application because an Arizona company (the "Arizona Company") had already registered a "Vericheck" trademark (the "Arizona Mark") for use with "check verification services." The Arizona Company first obtained federal registration in 1975 and renewed its mark in 1996.  [***1643]  The Arizona Company did not use the Arizona Mark in connection with services that compete with Vericheck, and there is no evidence that the Arizona Mark was used on the Internet. The Arizona Company did not further renew its registration in 2006, and its mark expired while this case was pending.

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586 F.3d 1190 *; 2009 U.S. App. LEXIS 25132 **; 92 U.S.P.Q.2D (BNA) 1641 ***

DAVID LAHOTI, an individual, Plaintiff-Appellant, v. VERICHECK, INC, a Georgia Corporation, Defendant-Appellee.

Subsequent History: On remand at, Findings of fact/conclusions of law at Lahoti v. Vericheck, 708 F. Supp. 2d 1150, 2010 U.S. Dist. LEXIS 35323 (W.D. Wash., Apr. 9, 2010)

Prior History:  [**1] Appeal from the United States District Court for the Western District of Washington. D.C. No. CV-06-01132-JLR. James L. Robart, District Judge, Presiding.

Lahoti v. Vericheck, Inc., 2007 U.S. Dist. LEXIS 91997 (W.D. Wash., Dec. 3, 2007)

Disposition: AFFIRMED IN PART, VACATED IN PART, AND REMANDED.

CORE TERMS

Vericheck, trademark, district court, domain name, registration, Disputed, bad faith, verification, marks, registered, classification, courts, federal trademark, cases, defer, summary judgment, cybersquatting, website, clear error, infringement, vacate, clearly erroneous, safe harbor, Lanham Act, cybersquatter, affirming, plainly, links

Business & Corporate Compliance, Federal Unfair Competition Law, Lanham Act, Scope, Trademark Law, Special Marks, Service Marks, General Overview, Causes of Action Involving Trademarks, Infringement Actions, Determinations, Computer & Internet Law, Trademark Protection, Protection of Rights, Internet Domain Names, Eligibility for Trademark Protection, Distinctiveness, Evidence of Distinctiveness, Factors for Determining Confusion, Intent of Defendant to Confuse, Standards of Review, Clearly Erroneous, Likelihood of Confusion, Consumer Confusion, Subject Matter of Trademarks, Terms Requiring Secondary Meaning, Terms With Inherent Distinctiveness, Terms Requiring Secondary Meaning, Descriptive & Laudatory Terms, Determinations of Protectability, Terms With Inherent Distinctiveness, Suggestive Terms, Registration Procedures, Federal Registration, Federal Registration as Evidence, Evidence, Inferences & Presumptions, Presumptions, Inferences, Defenses, Definition of Descriptive Terms, Civil Procedure, Appeals, Summary Judgment Review, Standards of Review, Judgments, Summary Judgment, Partial Summary Judgment