IP Law Daily, TRADEMARK—S.D.N.Y.: New York City-based healthcare service provider’s suit against competitor dismissed, (Mar 5, 2024)

By Saurabh Kashyap, B.A., LL.B.

While trade dress infringement, unfair competition, and false designation of origin claims were dismissed without prejudice due to their lack of specificity, false advertising claims were dismissed with prejudice, citing the plaintiff’s failure to state a claim.

A federal district court in New York granted a Long Island-based healthcare service provider’s motion to dismiss a trademark lawsuit filed by its New York City competitor. The court dismissed the trade dress infringement, unfair competition, and false designation of origin claims without prejudice, citing the plaintiff's lack of specificity, but allowed the plaintiff to move for leave to file an amended complaint. Furthermore, the court dismissed the false advertising claims under the Lanham Act and the New York General Business Law (NYGBL) with prejudice, citing the plaintiff's failure to state a claim (NYU Langone Health System v. Northwell Health, Inc., March 1, 2024, Caproni, V.).

Background. The plaintiff, NYU Langone Health System and NYU Langone Hospitals (NYU Langone) is a leading healthcare provider headquartered in Manhattan, New York, and operates extensively within the New York City metropolitan region. The defendant, Northwell Health, Inc. (Northwell), is based in Long Island and serves a similar market.

NYU Langone alleged that Northwell had copied its distinctive, purple-themed advertising, infringing upon its trade dress and goodwill. Thus, NYU Langone filed this lawsuit against Northwell, claiming trade dress infringement, unfair competition, false designation of origin under the Lanham Act, and violations of NYGBL and common law. In response, Northwell filed the instant motion to dismiss the complaint, arguing that NYU Langone had not sufficiently articulated claims upon which relief could be granted.

Trade dress infringement. NYU Langone asserted that Northwell had infringed upon its trade dress, explicitly pointing to Northwell's adoption of a purple color scheme in its advertising that was strikingly similar to NYU Langone's branding. NYU Langone argued that this imitation was a calculated attempt to benefit from its goodwill and reputation in the healthcare market, especially after it had expanded its operations into Long Island. NYU Langone further contended that the distinctiveness of its purple-themed advertising, which had been used consistently in its marketing materials, was a protected trade dress under the Lanham Act and that Northwell's similar use constituted infringement.

In response, Northwell contested the allegations by questioning the distinctiveness and protectability of NYU Langone’s claimed trade dress. Northwell argued that the use of a color scheme in advertising could not be exclusively appropriated by NYU Langone, especially given the broad and non-specific description of the purported trade dress. Northwell also contended that colors and general marketing aesthetics did not meet the criteria for trade dress protection, particularly in the absence of a clearly defined and unique design element that consumers directly associate with NYU Langone’s services.

Upon analysis, the court found that NYU Langone's description of its trade dress was too broad and lacked the specificity required for protection under the Lanham Act. The court highlighted the necessity for a trade dress claim to articulate a clear and specific combination of elements distinctively associated with a brand. Given that NYU Langone’s claims encompassed a wide range of advertising elements without clear delineation or specificity, the court concluded that it did not sufficiently define a protectable trade dress. Therefore, the trade dress infringement claim was dismissed without prejudice.

Unfair competition. NYU Langone argued that Northwell engaged in unfair competition by allegedly copying its distinctive advertising strategy, aiming to leverage NYU Langone's established goodwill among consumers. On the other hand, Northwell contested these claims, urging the court to dismiss them for lack of specificity and failure to demonstrate any actual unfair competition under the legal standards. The court, siding with Northwell, found that NYU Langone’s broad and unspecific allegations failed to establish a plausible claim for unfair competition. The lack of detailed articulation regarding the alleged unfair practices led to the dismissal of this claim without prejudice.

False designation of origin. NYU Langone maintained that Northwell's advertising misled consumers into believing there was an association or approval by NYU Langone, thus infringing on its trade dress rights. Northwell rebutted, arguing that its advertising changes were lawful and did not falsely designate the origin of its services. Examining these arguments, the court concluded that NYU Langone failed to concretely define its trade dress or demonstrate how Northwell's actions constituted a false designation of origin. This led to the dismissal of the claim without prejudice.

False advertising claims. In its false advertising claims, NYU Langone contended that Northwell's marketing materials made unfounded assertions that were misleading and damaging to its reputation, given its own accolades and rankings. In contrast, Northwell defended its promotional materials, asserting that its claims were based on credible third-party ratings from Healthgrades and constituted permissible puffery.

Upon reviewing these claims, the court found that NYU Langone did not sufficiently demonstrate that Northwell's advertisements were false or misleading. It noted that Northwell had accurately cited Healthgrades for its rankings, and such reference did not constitute a false statement. Furthermore, the court deemed Northwell's assertion of providing the "best care in Manhattan" as a subjective opinion, typically considered non-actionable puffery in advertising. Consequently, the court dismissed these false advertising claims with prejudice.

Deceptive trade practices. Alleging deceptive trade practices, NYU Langone posited that Northwell's advertising strategy mirrored its trade dress. NYU Langone further claimed that such practices misled consumers regarding the origin of healthcare services, potentially affecting consumer choice. Northwell refuted these allegations, emphasizing the distinctiveness of its branding and denying any intent to deceive consumers and that any similarities in advertising were coincidental and within the bounds of competitive market practices.

The court, upon analysis, ruled that NYU Langone had not adequately established that Northwell’s actions resulted in a significant or specific injury to the public interest beyond the usual competitive conduct expected in the marketplace. Therefore, the claim was dismissed without prejudice, allowing NYU Langone the possibility to amend its complaint.

The Case is No. 1:23-cv-05032-VEC-JLC.

Attorneys: Amy Marie Kerlin (Reed Smith LLP) for NYU Langone Health System. Edward Henry Rosenthal (Frankfurt Kurnit Klein & Selz, PC) for Northwell Health, Inc.

Companies: Northwell Health, Inc.

Cases: Trademark NewYorkNews