Suit Over Name From ‘Atlas Shrugged’ Persists

(CN) - The 9th Circuit on Wednesday revived a trademark dispute between two California companies named in honor of Hank Rearden, a character in Ayn Rand's novel, "Atlas Shrugged."

The federal appeals court in San Francisco found that many questions remain as to whether Rearden Commerce, a Silicon Valley-based business concierge company, infringed on marks owned by Rearden LLC, a Bay Area technology incubator and production company with various affiliates.

Steve Perlman founded the company Rearden Steel Inc. in 1999, choosing the name "at least in part, because it was a reference to the 'Hank Rearden' character from Ayn Rand's novel, Atlas Shrugged," according to the court. By 2004 the company had become Rearden Inc., and then Rearden LLC. In addition to developing Perlman's creative projects, the company serves as an "incubator" for start-up ventures. It offers funding, administrative services, office space, travel services and various online resources.

Rearden Commerce is a web-based concierge service that offers customers the "Rearden Personal Assistant," which helps organize travel plans and links to many travel vendors. Patrick Grady, who "also has an affinity for Rand's 'Hank Rearden' character," named his company in 2005, according to the court.

After Rearden Commerce registered several domain names in 2006 that included the Rearden name, Rearden LLC filed a federal complaint in San Francisco, alleging violations of federal trademark and anti-cybersquatting laws.

U.S. District Judge Marilyn Patel granted summary judgment to Rearden Commerce, finding that there had been little consumer confusion and that the defendant had acted in good faith when it registered the domain names. Among other things, the court found it unlikely that the two companies would have the same customers, or that one would be mistaken for the other.

The 9th Circuit unanimously disagreed and vacated.

It found that the companies are actually quite similar as they have "appeared in the same publications, attended the same trade shows, and relied on private investment funding from the same sources."

Patel had been right, however, in defining the name Rearden as a "suggestive mark," according to the three-judge appellate panel

Rearden LLC had claimed that the mark was "arbitrary" and 'fanciful" and had no meaning outside of itself.

"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," according to the opinion authored by Judge Robert Cowen, who sat on the panel by designation from the 3rd Circuit (parenthesis in original).

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