Seattle Trademark Lawyer

On August 30, the Western District denied in part and granted in part cross-motions for summary judgment brought by plaintiff David Lahoti and defendant Vericheck, Inc., on Mr. Lahoti’s complaint for declaratory relief challenging the National Arbitration Forum’s UDRP order that his domain name be transferred to Vericheck, Inc., and finding that his use does not violate the Anti-Cybersquatting Consumer Protection Act. 

Vericheck provides check verification services, check collection services, and wireless payments. It claims it has used the mark VERICHECK since 1995 and has maintained an Internet presence at www.vericheck.net since 1999. The company also registered vericheck.org, vericheck.cc, vericheck.us, and vericheck.biz. In 2001, Vericheck registered a service mark with the State of Georgia described as “a depiction of a check mark over the word ‘vericheck.’”

Mr. Lahoti is a self-proclaimed “Internet entrepreneur.” He has registered thousands of domain names, based on services he “might offer” based on his “ideas for new ventures.” In 2003, Mr. Lahoti registered vericheck.com, the domain name at issue in this suit. Under his ownership, the sole function of the associated Web site was to redirect Internet users to a different site under the control of Oversee.net, which in turn, provided Internet search services. Vericheck contends that the search results on Oversee.net’s Web site pointed consumers to Vericheck’s competitors. Vericheck claimed that Mr. Lahoti expressed a willingness to sell the domain name to Vericheck in 2005 for $48,000 and in 2006 for $100,000.

Since there was no dispute that vericheck.com and the VERICHECK mark are identical or confusingly similar, Judge James Robart focused on the elements of distinctiveness and bad faith. The court found that “given that the question of distinctiveness is ordinarily for the trier-of-fact, and because the court concludes that a reasonable jury could find the mark suggestive,” both parties’ cross-motions on this element should be denied.

As to the issue of bad faith, the court found: “Mr. Lahoti’s conduct satisfies nearly all of the … factors supporting a determination of bad faith. Mr. Lahoti admits that he never used the Domain Name as a trademark. The Domain Name neither contains a variation of Mr. Lahoti’s legal name, nor any other name commonly used to identify him. Mr. Lahoti has never used the Domain Name in connection with the bona fide offering of goods or services, nor does he use the website for a non-commerical or ‘fair use’ purpose. Further, Vericheck provides evidence that, when active, Mr. Lahoti’s website directed consumers to another site that, in turn, provided search results listing some of Vericheck’s competitors. Mr. Lahoti does not dispute this fact. Moreover, Mr. Lahoti has registered thousands of internet domain names, some of which are identical to, or confusingly similar to, the distinctive marks of others. Perhaps most significant, Mr. Lahoti’s representative offered to sell vericheck.com on more than one occasion.”

For these reasons, the court concluded that “Mr. Lahoti acted in a bad faith attempt to profit, and that no reasonable jury could conclude otherwise.” Accordingly, the court found no triable issue existed on this element.

The court also denied both parties’ cross-motions as to trademark infringement, finding that Vericheck had not provided a sufficient basis for the court to say as a matter of law that likelihood of confusion exists.

Trial is scheduled for October 9.

The case cite is Lahoti v. Vericheck, Inc., 2007 WL 2570247, No. 06-1132 (W.D. Wash.).