United States District Court, S.D. New York
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For Guthrie HealthCare System, Plaintiff: Bradley Louis Mitchell, Stevens & Lee, New York, NY; Elliott Jonathan Stein, Stevens & Lee, P.C(NJ), Princeton, NJ.
For Contextmedia, Inc., an Illinois Corporation, Rishi Shah, an individual, Defendants: James Daniel Arden, LEAD ATTORNEY, Michael Patrick Morrissey, Sidley Austin LLP (NY), New York, NY; Richard John O'Brien, LEAD ATTORNEY, Anthony Balkissoon, PRO HAC VICE, Sidley Austin, LLP (Chicago), Chicago, IL.
OPINION & ORDER
KATHERINE B. FORREST, United States District Judge.
On October 26, 2012, Guthrie Healthcare System (" Guthrie" ) filed this trademark infringement action against ContextMedia, Inc. (" CMI" ), and its president and chief executive officer (" CEO" ), Rishi Shah. (Complaint, ECF No. 1; Trial Decl. of Rishi U. Shah (" Shah Decl." ) ¶ 1, ECF No. 105.) Guthrie amended its complaint one year later to allege infringement of additional trademarks. (ECF No. 44.) The Amended Complaint asserts eight counts of federal trademark infringement pursuant to 15 U.S.C. § 1114 (Counts One through Eight); a claim of unfair competition under the Lanham Act, pursuant to 15 U.S.C. § 1125(a) (Count Nine); a claim of false designation of origin under the Lanham Act, pursuant to 15 U.S.C. § 1125(a) (Count Ten); common-law unfair competition (Count Eleven); federal trademark dilution under the Lanham Act, pursuant to 15 U.S.C. § 1125(c) (Count Twelve); and unjust enrichment (Count Thirteen).
On January 16, 2014, the Court partially granted and partially denied CMI's motion for summary judgment. (" SJ Op.," ECF No. 73.) The Court found that no triable issue of material fact existed as to actual consumer confusion, bad faith, or willful deception. (Id. at 13-18.) Accordingly, the Court found that monetary relief was unavailable to Guthrie under the Lanham Act, and disposed of Count Eleven, state-law unfair competition, which requires bad faith as an element. (Id. at 27, 29-31.) Guthrie voluntarily abandoned its dilution claim in Count Twelve. (ECF No. 51 at 1 n.1.) The Court's opinion left Counts One through Eight for copyright infringement, Count Nine for unfair competition, Count Ten for false designation of origin, and Count Thirteen for unjust enrichment to be resolved at trial. (SJ Op. 31.)
On January 31, 2014, the Court granted CMI's motion for partial reconsideration and dismissed Count Thirteen of the complaint related to unjust enrichment, with respect to CMI Marks One through Seven. (ECF No. 92.) Additionally, prior to trial, the Court severed Count Eight, regarding the trademark " ContextMedia Health," which CMI applied to register with the U.S. Patent and Trademark Office (" PTO" ) after this lawsuit had commenced. (See Trial Tr. 27, Feb. 20, 2014, ECF No. 113.) That trademark is the subject of Guthrie's pending motion for partial reconsideration. (ECF No. 85.)
The Court held a bench trial on February 5, 2014, on Counts One through Seven, Count Nine, and Count Ten. This Opinion & Order constitutes the Court's findings of fact and conclusions of law as to those counts.
For the reasons set forth below, the Court finds that there is a " likelihood of confusion" between Guthrie and CMI's trademarks that affects " numerous ordinary prudent purchasers" in Guthrie's service area--the Twin Tiers region of Northern
Pennsylvania and Southern New York (the " Guthrie Service Area" ). See Gruner Jahr USA Publ'g, a Div. of Gruner Jahr Printing & Publ'g Co. v. Meredith Corp., 991 F.2d 1072, 1075 (2d Cir. 1993). However, the Court also finds that there is no likelihood of confusion, or that " numerous ordinary prudent purchasers" are unlikely to be confused, outside of the Guthrie Service Area. Accordingly, the Court awards limited injunctive relief, as described below, in the Guthrie Service Area.
I. FINDINGS OF FACT
A. Guthrie's Operations
Guthrie is composed of Guthrie Healthcare, the Guthrie Clinic, and the Guthrie Foundation. (Decl. of Joseph A. Scopelliti (" Scopelliti Decl." ) ¶ 6, ECF No. 100.) Guthrie operates 32 medical facilities, including three hospitals and 29 medical clinics. (Decl. of Mary Ann Dougherty (" Dougherty Decl." ) ¶ 7, ECF No. 98.) Guthrie also operates a number of specialized healthcare facilities, including separate cardiology, cancer, dialysis, endocrine and bariatric, orthopedic, pediatric and same-day surgery centers, as well as an orthodontics clinic, a specialty eye-care and optometry business, and a fitness center. (Id. ¶ 7, 9.) In addition, Guthrie offers occupational health services to employers under contract. (Id. ¶ 11.) Guthrie's operations are in facilities located in the Twin Tiers Region of Northern Pennsylvania and Southern New York (the " Guthrie Service Area" ). (See Tr. 88:6-14, 114:10-115:16.) Guthrie's medical practice is comprised of 280 physicians and 130 mid-level providers (physician assistants and nurse practitioners). (Scopelliti Decl. ¶ 9.) These physicians practice in 23 locations in southern New York and northern Pennsylvania. (Id. ¶ 9; Tr. 61:12-17.) Guthrie derives a substantial portion of its patient-care revenue from referrals from physicians and medical professionals. (Dougherty Decl. ¶ 10; Scopelliti Decl. ¶ 30.)
Guthrie focuses considerable marketing efforts on obtaining referrals from doctors and medical professionals. (Id. ¶ 31.) Securing referrals from physicians with whom Guthrie might otherwise compete is a delicate business, and Guthrie has made special efforts to make referring physicians comfortable in referring patients to Guthrie without fear that Guthrie will try to provide non-referred services to those patients. (Id. ¶ 32.)
Guthrie also has an extensive training program for clinical professionals, including training in nursing, residency programs for medical students, medical fellowships, and continuing medical education. (Id. ¶ 8.)
The Guthrie Foundation conducts medical research. (Id. ¶ 39.) The Foundation also manages investigator-initiated trials and manages the Guthrie Institutional Review Board, which approves, monitors, and reviews research involving human experimentation. (Id. ¶ 40.) The Foundation further assists investigators in presenting their findings at various seminars and symposia. (Id. ¶ 41.) Funders of research are very sensitive to potential and actual conflicts of interest. (Tr. 71:18-72:07, 94:22-95:15, 96:10-18.) As a result, Guthrie takes very seriously the need to maintain independence from the sponsorship of brands or products, such as a particular type of branded pharmaceutical product. (Tr. 72:09-22.) Guthrie has a policy, to which it steadfastly adheres, to refuse to provide any endorsements or advertisements for third-party products or services so as to avoid any conflict, bias, or partiality, or the appearance of such. (Scopelliti Decl. ¶ 43.) Guthrie also insists that any medical information that it disseminates--whether over the Internet or in symposia, and whether to physicians and medical professionals or to patients and the public--meets evidence-based medical guidelines. (Id.)
B. The Guthrie Mark
Guthrie launched its trademark and an associated new brand identity in September 2001. (Dougherty Decl. ¶ 34.) Monigle Associates developed the mark. (Scopelliti Decl. ¶ 16; Declaration of Michael Herburger (" Herburger Decl." ) ¶ ¶ 6, 17, ECF No. 94.) The graphic, featuring a stylized human figure with arms upraised and in the center of a multi-colored shield, was intended to portray that Guthrie was putting the patient at the center of all things that Guthrie did and to suggest heritage, strength and stability. (Id. ¶ ¶ 17, 19, 20.) The blue color in the shield was chosen to represent strength and stability, and the orange and yellow represented warmth and a human quality. (Id. ¶ 20.)
At the time that Monigle designed the Guthrie Mark, other trademarks in existence used stylized human figures and other trademarks used shields; however, to Monigle's senior creative director Michael Herburger's knowledge, no other trademark featured a stylized human figure superimposed on a shield segmented into four sections. (Id. ¶ ¶ 21-22.) Monigle also prepared, and Guthrie deployed and has adhered to, documents called " Guidelines for Signature Use," " Design System Guidelines," and " Design System Development" to assist Guthrie in its launch of and to control the use of its trademark. (Id. ¶ ¶ 26-28; Scopelliti Decl. ¶ ¶ 18, 21.)
On January 22, 2008, the PTO registered U.S. Trademark Registration No. 3,374,204 (the " Guthrie Mark" ), which specified coverage for " medical services, namely, hospital, emergency room, nursing home, home infusion, hospice and home health care and nursing services." (PX-012.) On February 13, 2013, the PTO acknowledged Guthrie's filing of a Declaration of Incontestability for the Guthrie Mark. (Dougherty Decl. ¶ 67.)
The Guthrie Mark has both textual and graphic components:
Guthrie has invested substantial sums in promoting the Guthrie Mark, and regularly uses it as a primary identifier of its health system, including on signage, in advertising, on its websites www.guthrie.org and www.ichooseguthrie.org, and the like. (Dougherty Decl. ¶ ¶ 37-38, 40-43, 50-52; Scopelliti Decl. ¶ 20.) The Guthrie website is a branded portal that delivers a variety of information to patients and potential patients, as well as other customers, employees, students, research partners, donors, and the community. (Id. ¶ 33.) The website provides access to on-demand health-related content regarding a variety of medical conditions and issues; patients can also use the website to check on or schedule appointments. (Id. ¶ 34.)
Beginning in 2001, Guthrie ran television advertising prominently displaying the Guthrie Mark in its Service Area. (Dougherty Decl. ¶ ¶ 44-45.) Guthrie has also partnered with local television stations to produce health-related features that feature the Guthrie Mark. (Id. ¶ 46.) From July 1, 2008 to June 30, 2013, Guthrie spent $7,250,000 promoting the Guthrie Mark and brand, of which approximately $5,400,000 was spent on advertising featuring the Guthrie Mark. (Id. ¶ ¶ 56-57.)
Guthrie has a nascent program that it refers to generically as " digital signage." (Scopelliti Decl. ¶ 37.) This program is designed to " push" or disseminate health-related content onto video screens at Guthrie facilities. (Dougherty Decl. ¶ ¶ 62-63; Scopelliti Decl. ¶ 37.) At this point, the program (started in 2010) is not robust and is not likely to become particularly robust in the near term; it has been deployed on two video screens at two Guthrie facilities. (Dougherty Decl. ¶ 65; Scopelliti Decl. ¶ 37; Tr. 57:19-23.) The program was included in the fiscal year 2013 and fiscal year 2014 budget requests, but only as a line item and without a developed business plan or programming behind it. (Dougherty Decl. ¶ 64; see Tr. 56:14-57:12, 121:11-124:08, 135:23-137:05, 142:12-143:23.)
C. CMI's Operations
Rishi Shah, Shradha Agarwal, and Derek Moeller founded CMI in 2006. (Declaration of Rishi U. Shah (" Shah Decl." ) ¶ 1, ECF No. 105.) Shah is CMI's president and CEO and one of its directors. (Id.) CMI has offices in Chicago and New York City, and employs 42 people. (Id.)
CMI's business is delivering educational, health-related content to physician practices; it derives its revenue from selling advertising that accompanies the content. (Id. ¶ 2.) CMI owns and operates a series of digital healthcare platforms delivering condition-specific educational programming to patients at waiting areas and in some cases to treatment rooms or physicians' offices. (Id.) In almost all cases, CMI derives its revenue through advertisements periodically displayed between segments of programming. (Id.) The physicians therefore do not generally pay anything to have the service in their office. (Id.) A very small percentage of physicians chooses to pay for the service and does not receive advertisements. (Id.)
CMI's primary advertisers, referred to as " sponsors," are sophisticated companies that market pharmaceutical and other healthcare products and/or services--mostly large pharmaceutical companies. (Id. ¶ ¶ 2, 6.) CMI's competitors for similar services are PatientPoint (formerly Health Advice), Health Monitor Network, Health Media Network, Health Focus Media, and Accent Health. (Id. ¶ 2.) CMI's direct customers are the companies who purchase advertising on its service and the medical providers with whom CMI contracts to deploy its service. (See id.) The target audience for the advertisers and physicians
are the patients or others who are in the waiting or treatment areas where CMI's service is aired.
CMI licenses a large collection of digital educational content related to health and wellness. (Id. ¶ 3.) The videos are generally short segments that focus on easy-to-implement lifestyle changes, including nutrition and exercise tips. (Id.) Some other videos are in-depth features on specific conditions. (Id.) CMI licenses content from organizations such as the American Heart Association, the American Dietetic Association, the Academy of Nutrition and Dietetics, the Juvenile Diabetes Research Foundation, Health Day TV, and D Life. (Id.)
CMI displays its programming on flat-panel display units, media players, and other hardware in physician's offices. (Id.) It delivers new content on approximately a monthly basis. (Id. ¶ 4.)
CMI has two websites. The first, www.contextmediahealth.com, is aimed at its member physician offices; the second, www.contextmediainc.com, is aimed at potential sponsors, prospective employees, and the media. (Id. ¶ 10.) CMI does not offer its service over the Internet to be viewed, for instance, in a patient's home.
The CMI screen, as seen by the viewer, is divided into three parts: a sidebar on the left side of the screen, a main content window to the right of the sidebar, and a news ticker (a line of text that scrolls across the bottom of the screen). (Id. ¶ 11.) CMI's marks regularly appear in the sidebar; they do not appear in the news ticker, and they may appear from time to time in the background of the main window. (Shah Decl. ¶ ¶ 13-14; see, e.g., PX-159, at 11:24-12:13, PX-160, at 12:07-12:57.) The educational content, which fills the main content window when it appears, are not advertisements, " advertorials," or " infomercials," but are independently produced. (Shah Decl. ¶ 15.) Although CMI licenses most of its video content, it has also worked with third parties to produce certain of its own video content. (Id.; Tr. 165:12-22.)
Shah had not heard of the Guthrie Healthcare System, nor was he aware of the Guthrie Mark, until early 2012. (Shah Decl. ¶ 23.)
D. CMI's Eight Trademarks
CMI has adopted a number of trademarks in connection with its business. A graphic artist, Anthony Bonilla, created artwork that CMI used in ...