IP Law Daily, TRADEMARK—S.D.N.Y.: Medical education provider’s marks may cause confusion with healthcare facilities’ mark, (Jun 23, 2014)

By Jody Coultas, J.D.

The federal district court in New York City granted Guthrie Healthcare System limited injunctive relief against ContextMedia, Inc. (CMI) based on a likelihood of confusion between the parties marks (Guthrie Healthcare System v. ContextMedia, Inc., June 20, 2014, Forrest, K.).

Guthrie operates hospitals, medical clinics, and specialized healthcare facilities in Northern Pennsylvania and Southern New York. The U.S. Patent and Trademark Office registered U.S. Trademark Registration No. 3,374,204 (the "Guthrie Mark"), which featured a stylized human figure with arms upraised and in the center of a multi-colored shield and covered medical services.

CMI delivers educational, health-related content to physician practices and operates a series of digital healthcare platforms delivering condition-specific educational programming to patients at waiting areas, treatment rooms, and physicians' offices. The PTO registered three of CMI’s marks, and applications to register four other marks were pending. CMI filed an Intent to Use Trademark Application to register an eighth mark, which it intended to be its primary mark going forward.

After notifying CMI that it was infringing its trademark, Guthrie filed trademark infringement claims and sought injunctive relief. To determine whether to issue injunctive relief, courts look at (1) the strength of the mark; (2) the degree of similarity between the two marks; (3) whether the products compete in the same market; (4) the likelihood that the prior owner will bridge the gap; (5) actual confusion; (6) the defendant's good faith in adopting its mark; (7) the quality of the defendant's product; and (8) the sophistication of the buyers.

Trademark infringement. The strength of Guthrie’s mark weighed in favor of finding a likelihood of confusion, according to the court. Registered trademarks are presumed to be distinctive and afforded protection. The name "Guthrie" was fanciful, or without any dictionary meaning. The stylized human figure inside a shield was also distinctive. Use of the mark since 2001 also weighed in favor of finding that the mark was strong. Although the components of the mark's graphic element have been used in other logos in the healthcare field and Guthrie did not show that customers necessarily recognize the mark, the mark was sufficiently strong to weigh in favor of an injunction.

There was a high degree of similarity between the marks at issue, according to the court. Both marks featured a stylized human figure superimposed on a shield segmented into four sections and used a similar color scheme.

While CMI operates nationally, Guthrie only offers services in Southern New York and Northern Pennsylvania. The similarity of the graphic portion of the Guthrie and CMI marks was likely to confuse members of the public, despite the fact that the companies' products, markets, and services were not identical and did not compete directly. The proximity factor also weighed in favor of an injunction, according to the court.

Both Guthrie’s and CMI’s consumers were likely to be quite varied, according to the court. The more sophisticated the relevant market, the less likely similarities in trademarks will result in confusion concerning the source or sponsorship of the product. Neither party could show that its customers would be highly sophisticated.

Three factors weighed against injunctive relief and one was neutral, according to the court. Guthrie's plans to enter into the same business as CMI were too speculative and vague to prove its intent to bridge the gap. Also, there was no evidence of actual consumer confusion or that CMI acted in bad faith in adopting its first seven marks. The court did not find either a similarity or difference in quality that materially affected the likelihood of confusion.

Based on the analysis above, the court granted Guthrie injunctive relief barring CMI from prospectively from using its seven marks in future content, and requiring a disclaimer denying any relationship with Guthrie in CMI’s present use of the marks in its products already in commerce in Northern Pennsylvania and Southern New York. To obtain injunctive relief, a plaintiff must demonstrate an irreparable injury; monetary damages are inadequate to compensate for that injury; the balance of hardships favored an equitable remedy; and that the public interest would not be disserved by an injunction. Because there was a likelihood of confusion marks, the court could presume irreparable harm. Monetary damages were unavailable due to the lack of showing of bad faith, willful infringement, or actual confusion.

However, the court did not make a finding regarding CMI's infringement with respect to CMI’s eighth mark, which was adopted after this litigation had commenced.

Individual liability. The president and CEO of CMI and one of its directors, could not held individually liable for CMI's infringement, according to the court. Cases in which courts have held individual officers to be liable have generally involved some element of willful infringement, bad faith, or counterfeiting. In this case, no reasonable juror could find willful infringement or bad faith in these circumstances.

Unfair competition and false designation of origin. To state claims for unfair competition and false designation of origin, the plaintiff must show a likelihood that an appreciable number of ordinarily prudent purchasers will be confused as to the source of the goods. Therefore, the court found that CMI was liable for unfair competition and false designation of origin with respect to CMI’s first seven trademarks.

The case is No. 12 Civ. 7992 (KBF).

Attorneys: Bradley Louis Mitchell (Stevens & Lee PC) for Guthrie Healthcare System. James Daniel Arden (Sidley Austin LLP) for ContextMedia, Inc.

Companies: Guthrie Healthcare System; ContextMedia, Inc.

Cases: Trademark NewYorkNews