IP Law Daily, TRADEMARK—W.D. Wash.: No infringement in logo dispute between Washington clinics, (Mar 20, 2023)

By Ursula Furi-Perry, J.D., MBA

Plaintiff clinic’s marks were descriptive under both the imagination test and the competitor’s needs test, and did not acquire secondary meaning so as to warrant protection.

In a dispute between two health clinics, a federal district court in Washington state held that the plaintiff clinic’s word and design marks were descriptive under both the imagination test and the competitor’s needs test. Moreover, the marks did not acquire secondary meaning, and the plaintiff did not establish the likelihood of confusion with the defendant’s similar marks (Peninsula Community Health Services v. Olympic Peninsula Health Services PS, March 17, 2023, Settle, B.).

Background. Peninsula Community Health Services (“PCHS”), a non-profit health service company that provides substance use treatment services in Washington State, sued a fellow provider, Olympic Peninsula Health Services (“OPHS”), a for-profit corporation. Both PCHS and OPHS are “hubs” in Washington’s “Hub and Spoke Project,” a program designed to connect community providers (“spokes”) around a “hub” that offers medication-assisted treatment; the two companies serve different geographic areas. PCHS has been in business much longer than OPHS and provides additional services beyond substance use treatment services.

PCHS sued OPHS in October 2020 in the U.S. District Court for the Western District of Washington at Tacoma, alleging Unfair Competition and False Designation of Origin under the Lanham Act, trade name infringement, trademark infringement, and violation of the Unfair Business Practices Act. At the crux of the case were the parties’ design marks, which featured green pine trees and mountains alongside the respective party’s name. Both companies’ word marks feature descriptive terms, explaining where they are located and the types of services they provide.

Analysis. The court noted that all four of the claims stemmed from the Lanham Act and rose and fell with that claim. Under the Lanham Act, the parties agreed that PCHS owns the marks at issue but disputed whether the mark was distinctive, thereby deserving of trademark protection.

PCHS conceded that its word mark is descriptive but argued that its design mark is suggestive. It also argued that its mark had acquired secondary meaning. OPHS disputed both of those arguments. The court used two different tests to review the marks: the imagination test and the competitor’s needs test. Under the imagination test, the court reviewed whether imagination or a mental leap was required to reach a conclusion as to the nature of the services being referenced. Under the competitor’s needs test, the court reviewed the extent to which the mark was actually needed by competitors to identify their goods or services.

The court held that PCHS’s mark was merely descriptive and had not acquired further protection under either of those tests. The court commented on the weakness of both companies’ marks, noting that the words used were commonplace and descriptive in nature, and that the marks featured design elements that were not particularly unique, making it likely that people would identify the businesses by them.

Moreover, PCHS offered no direct evidence that its design mark had acquired secondary meaning, the court stated. To determine whether there PCHS was able to show a likelihood of confusion, the court analyzed eight factors: (1) strength of the mark; (2) similarity of the marks; (3) proximity or relatedness of services; (4) defendant’s intent in selecting the mark; (5) actual confusion; (6) marketing channels used; (7) likelihood of expansion; and (8) degree of consumer care.

In this case, the court held, both marks were relatively weak. There were some similarities between them, namely both design marks featuring trees and both marks containing the names of the parties and the words “health services” and “peninsula,” but the similarities ended there, the court said, so that the second factor favored the defendant. While the parties provide similar services, there was no evidence of intentional copying of the plaintiff’s mark, nor of actual confusion, nor persuasive evidence that either party plans to move into the other’s service area. Consumers accessing health care services exercise a heightened degree of care, with that factor also in favor of the defendant. The court held that PCHS failed to establish a likelihood of confusion. Its mark was not entitled to protection.

Conclusion. The court entered judgment in the defendant clinic’s favor and closed the case.

The Case is No. 3:20-cv-05999-BHS.

Attorneys: Michael G. Atkins (Atkins Intellectual Property PLLC) for Peninsula Community Health Services. David Allen Lowe (Lowe Graham Jones PLLC) for Olympic Peninsula Health Services PS.

Companies: Peninsula Community Health Services; Olympic Peninsula Health Services PS

Cases: Trademark WashingtonNews