UHS of Delaware, Inc. v. United Health Services, Inc.
MEMORANDUM (Order to follow as separate docket entry) re: 150 MOTION for Summary Judgment filed by UHS of Delaware, Inc., 151 MOTION for Partial Summary Judgment filed by Senior Living at Ideal, Professional Home Care, Inc., Ideal living center housing corporation, United Health Services Hospitals, Inc., Twin Tier Home Health, Inc., United Medical Associates, P.C., Delaware Valley Hospital, Inc., United Health Services, Inc. (See memo for complete details.)Signed by Chief Judge Christopher C. Conner on 12/29/16. (ki)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
UHS OF DELAWARE, INC.,
UNITED HEALTH SERVICES,
INC., et al.,
CIVIL ACTION NO. 1:12-CV-485
(Chief Judge Conner)
The instant matter arises from a trademark dispute between plaintiff UHS
of Delaware, Inc. (“UHS Delaware”) and defendants United Health Services, Inc.,
(“United Health Services”), United Health Services Hospitals, Inc., Professional
Home Care, Inc., Twin Tier Home Health, Inc., Ideal Senior Living Center, Inc.,
Ideal Senior Living Center Housing Corporation, Delaware Valley Hospital, Inc.,
and United Medical Associates. Before the court are UHS Delaware‟s motion (Doc.
150) for summary judgment and defendants‟ motion (Doc. 151) for partial summary
Factual Background and Procedural History1
The factual background of this case is detailed in several prior opinions,
familiarity with which is presumed.2 UHS Delaware is the healthcare management
company for Universal Health Services, Inc. (“Universal”). (Doc. 157, Ex. 1 ¶ 3).3
Universal‟s subsidiaries own and operate more than 235 acute care and behavior
health facilities and surgery centers in a number of states throughout the country.
(Id.) Universal owns no subsidiaries or affiliates, and does not operate, in the state
of New York. (See Doc. 153, Ex. D at 3-4). UHS Delaware does not itself provide
healthcare services; instead, it manages an affiliated network of healthcare service
providers. (See Doc. 157, Ex. 1 ¶ 3).
Local Rule 56.1 requires that a motion for summary judgment pursuant to
Federal Rule of Civil Procedure 56 be supported “by a separate, short, and concise
statement of the material facts, in numbered paragraphs, as to which the moving
party contends there is no genuine issue to be tried.” LOCAL RULE OF COURT 56.1.
A party opposing a motion for summary judgment must file a separate statement
of material facts, responding to the numbered paragraphs set forth in the moving
party‟s statement and identifying genuine issues for trial. See id. Unless otherwise
noted, the factual background herein derives from the parties‟ Rule 56.1 statements
of material facts. (See Docs. 153, 155, 161-5, 163-1). To the extent the parties‟
statements are undisputed or supported by uncontroverted record evidence, the
court cites directly to the statements of material facts.
See UHS of Delaware, Inc. v. United Health Servs., Inc., No. 1:12-CV-485,
2013 WL 1308303 (M.D. Pa. Mar. 28, 2013); UHS of Delaware, Inc. v. United Health
Servs., Inc., No. 1:12-CV-485, 2015 WL 539736 (M.D. Pa. Feb. 10, 2015); UHS of
Delaware, Inc. v. United Health Servs., Inc., No. 1:12-CV-485, 2015 WL 7294454
(M.D. Pa. Nov. 19, 2015).
For affidavits and declarations, the court will cite to the applicable
enumerated paragraph(s). Other exhibit citations, with the exception of deposition
transcripts, will reflect pagination assigned by the Electronic Case Filing system.
Citations to briefs will correspond to original word processing pagination.
UHS Delaware owns federal registrations for two trademarks: (1) the UHS
word mark, bearing U.S. Registration No. 1,696,433 (“the „433 mark”), and (2) the
UHS stylized mark, bearing U.S. Registration No. 2,741,663 (“the „663 mark”) for
use in connection with hospital services and hospital management services. (Id.
Exs. 2, 4; see Doc. 155 ¶ 1; Doc. 161-5 ¶ 1). The stylized mark appears as follows:
(Doc. 157, Ex. 4). UHS Delaware owns both marks via assignment from its parent,
Universal. (Id. Ex. 6). The „433 registration issued on June 23, 1992, and the „663
registration issued on July 29, 2003. (Doc. 153 ¶¶ 27-28; Doc. 157, Exs. 2, 4). The
marks have achieved “incontestable” status under the Lanham Act. (Doc. 155 ¶ 1;
Doc. 161-5 ¶ 1); see also 15 U.S.C. § 1065.
Defendants are eight nonprofit corporations which together comprise an
integrated healthcare system headquartered in the southern tier of New York.
(Doc. 153 ¶¶ 1, 5-14). Defendants include: (1) United Health Services, the healthcare
system‟s parent entity; (2) United Health Services Hospitals, Inc., a subsidiary of
United Health Services which operates, inter alia, Binghamton General Hospital,
Ideal/Wilson Medical Center, and eighteen physician practice clinics; (3) Delaware
Valley Hospital, Inc., a 25-bed critical access hospital; (4) Professional Home Care,
Inc., an advanced home care service; (5) Twin Tier Home Health, Inc., a certified
home health care agency; (6) Ideal Senior Living Center, Inc., a skilled nursing
facility and long term home health care program; (7) Ideal Senior Living Center
Housing Corporation, an independent living and adult care facility; and (8) United
Medical Associates, P.C., a multi-specialty medical practice group comprising 185
physicians and 128 advanced practice providers. (Id. ¶¶ 5-14). United Health
Services does not have any facilities outside of New York state. (Id. ¶ 2).
The United Health Services healthcare system began using the acronym
“UHS” in approximately 1982. An employee newsletter issued that year was titled
“UHS Life.” (Id. ¶ 17). Defendants issued seven subsequent newsletters titled “The
UHS News” between 1983 and 1990. (Id.) United Health Services also used “UHS”
in occasional pamphlets and certain annual reporting. (Id.) News articles and
reports regularly referred to the system as “UHS” during this time. (Id. ¶ 22). In
1990 or 1991, United Health Services erected monument signs outside of the
Binghamton and Wilson hospitals. (Id. ¶ 20). Each sign was approximately six feet
tall, boasting a large “United Health Services” seal and the hospital‟s name,
followed by subscript stating “United Health Services Hospitals” and “A Member of
the UHS Health Care System.” (Doc. 153-3 at 46, 66-67). United Health Services
registered its domain name—www.uhs.net—in July 1997. (Doc. 153 ¶ 25).
United Health Services adopted a new system wide brand in 1997. (See Doc.
155 ¶ 5; see also Doc. 161-5 ¶ 5). The rebranding initiative aimed to create a unified
corporate identity, structured around the following logo:
(See Doc. 157, Ex. 47). The branding guidelines issued to all United Health Services
entities stated: “There should be no variation in the logo. This will maintain clarity
and consistency throughout our system.” (Id. at 4).
Christina Boyd (“Boyd”), Vice President of Community Relations for the
United Health Services system, testified that system entities were required to and
did comply with the new branding policy, except for isolated incidents of “rogue”
advertisements by individual system entities. (Doc. 155 ¶ 7; Doc. 161-5 ¶ 7). The
record reflects that from 1997 until 2010, United Health Services displayed the new
logo on its website and included the logo in weekly employee newsletters, system
periodicals, annual reports, and advertisements. (Doc. 163, Ex. A, UHSHI 30(b)(6)
Dep. (Boyd) 70:15-76:19, 79:5-82:18, 96:12-15, 99:4-102:23, 108:22-110:7 (Jan. 14,
United Health Services began a new rebranding effort in 2009. (Doc. 155 ¶ 8;
Doc. 161-5 ¶ 8). The 2009 rebranding initiative was led by Boyd and a centralized
steering committee—called Integration, Too!—which included members of each
subsidiary‟s executive team as well as certain business unit leaders. (Doc. 155 ¶ 8;
Doc. 161-5 ¶ 8; see also Doc. 157, Ex. 19, UHSHI 30(b)(6) Dep. (Carrigg) 35:25-37:11
(Jan. 15, 2016)). On August 20, 2009, the Integration, Too! committee agreed to
adopt the following system wide logo:
(Doc. 155 ¶ 8; Doc. 161-1 ¶ 8; see also Doc. 157, Ex. 29 at 6). To achieve a unified
corporate identity, Integration, Too! also decided to rename each system entity to
include the “UHS” title followed by a specific location or services delimiter, i.e.,
“UHS Delaware Valley Hospital.” (Doc. 157, Ex. 35 at 3). United Health Services
introduced “UHS” and the stylized logo as its “new name” in June 2010. (Id. Ex. 61
UHS Delaware instituted this action with the filing of a complaint (Doc. 1)
on March 16, 2012, subsequently filing an amended complaint (Doc. 9) on April 26,
2012, and a second amended complaint (Doc. 14-3) on June 6, 2012. UHS Delaware
asserts the following claims: federal trademark infringement of the „433 mark
(Count I) and the „663 mark (Count III) under 15 U.S.C. § 1114; federal unfair
competition as to the „433 mark (Count II) and the „663 mark (Count IV) under
15 U.S.C. § 1125(a) and common law; state law infringement of the „663 mark under
54 PA. STAT. & CONS. STAT. ANN. § 1123 (Count V); and contributory infringement
under federal and state statutory law and common law against United Health
Services alone (Count VI). In the alternative, UHS Delaware seeks a declaration
of the parties‟ respective rights pursuant to 28 U.S.C. § 2201 (Count VII).
Defendants filed individual answers and affirmative defenses (Docs. 114-20)
on March 3, 2015. Among other defenses, each defendant asserts that it has senior
rights to the “UHS” mark against UHS Delaware in New York state. (See id.)
United Health Services separately asserted counterclaims against UHS Delaware,
seeking cancellation of the „433 and „663 marks. (Doc. 114). The court dismissed
United Health Services‟ counterclaims with leave to amend by memorandum and
order dated November 19, 2015. UHS of Delaware, Inc., 2015 WL 7294454. United
Health Services elected not to amend its counterclaims.
Following a period of discovery, the parties filed the instant cross-motions
(Docs. 150-51) for summary judgment, together with supporting papers.4 The
motions are fully briefed and ripe for disposition.
Standard of Review
Through summary adjudication, the court may dispose of those claims that
do not present a “genuine dispute as to any material fact” and for which a jury trial
would be an empty and unnecessary formality. FED. R. CIV. P. 56(a). The burden of
proof tasks the non-moving party to come forth with “affirmative evidence, beyond
the allegations of the pleadings,” in support of its right to relief. Pappas v. City of
United Health Services‟ responsive statement of facts (Doc. 161-5), as
docketed, discontinues at page 20, halfway through paragraph 5. The original filing
provided to the court includes all 42 pages and 42 paragraphs of the document. For
ease of reference, the court will cite to the docketed version of the statement of facts
as though it contains the full document. In addition to providing responses to each
of UHS Delaware‟s statements of fact, United Health Services‟ responsive statement
includes 26 paragraphs styled as “Additional Undisputed Facts that Warrant Denial
of Plaintiff‟s Motion.” Neither Federal Rule of Civil Procedure 56 nor Local Rule
56.1 authorizes this filing, and United Health Services did not request leave of court
therefor. The court will not consider the additional paragraphs of United Health
Services‟ statement as same fail to conform to our procedural rules.
UHS Delaware also runs afoul of Local Rule 56.1. Its counterstatement of
facts (Doc. 163-1) in opposition to defendants‟ motion does not contain enumerated
paragraphs “responding to the numbered paragraphs set forth in the statement”
provided by the moving party. LOCAL RULE OF COURT 56.1. Rather, UHS Delaware
asserts broadly in three opening paragraphs that it disputes paragraphs 15 and 16
of United Health Services‟ statement (concerning defendants‟ alleged continuous
use of the “UHS” mark) and then provides supplemental paragraphs supporting
those denials. (See Doc. 163-1). Consistent with Local Rule 56.1, with the exception
of paragraphs 15 and 16, the court deems United Health Services‟ statement of facts
to be admitted.
Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); see also Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to
sustain a judgment in favor of the non-moving party on the claims. See Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587-89 (1986). Only if this threshold is met may
the cause of action proceed. See Pappas, 331 F. Supp. 2d at 315.
Courts are permitted to resolve cross-motions for summary judgment
concurrently. See Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008); see
also Johnson v. Fed. Express Corp., 996 F. Supp. 2d 302, 312 (M.D. Pa. 2014); 10A
CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2720 (3d ed.
2014). When doing so, the court is bound to view the evidence in the light most
favorable to the non-moving party with respect to each motion. FED. R. CIV. P. 56;
Lawrence, 527 F.3d at 310 (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245
(3d Cir. 1968)).
Claims for trademark infringement and unfair competition share the same
essential elements under both the Lanham Act and Pennsylvania law. See A&H
Sportswear, Inc. v. Victoria‟s Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000);
Harp v. Rahme, 984 F. Supp. 2d 398, 409-10 (E.D. Pa. 2013). To prevail on either
claim, a plaintiff must establish that (1) the marks in dispute are valid and legally
protectable; (2) plaintiff owns the marks; and (3) defendant‟s use of a similar mark
generates “a likelihood of confusion.” A&H Sportswear, 237 F.3d at 210. The court
will address threshold issues of validity and ownership before delving into the more
nuanced likelihood of confusion inquiry and United Health Services‟ junior user
UHS Delaware’s Motion: Ownership and Validity of the Marks
United Health Services does not challenge UHS Delaware‟s ownership of
the „433 and „663 marks. (Doc. 155 ¶ 1; Doc. 161-5 ¶ 1). Nor does it dispute that the
marks are valid and legally protectable. (Doc. 155 ¶ 1; Doc. 161-5 ¶ 1). Instead,
United Health Services remonstrates throughout its papers that UHS Delaware
does not use either mark. (See Doc. 161-1 at 2-3, 14-15, 19).5 United Health Services
accordingly denies UHS Delaware‟s factual assertions concerning advertising and
promotional use of the marks. (See Doc. 161-5 ¶¶ 2-3). It further asserts that UHS
Delaware has not produced any evidence proving that its associated facilities are
licensed users of the „433 and „663 marks. (See Doc. 161-1 at 3). This preliminary
issue permeates many of United Health Services‟ Rule 56 arguments.
The Lanham Act extends its protections to registered marks in legitimate use
by a registrant‟s “related companies.” 15 U.S.C. § 1055. When a related company
uses a mark with a registrant‟s permission, that use “shall inure to the benefit of the
registrant,” so long as the registrant maintains sufficient control over the licensee‟s
use. Id. Authorized use by a related party will maintain a trademark owner‟s rights
even when the only use of the mark is by the related party. 3 J. THOMAS MCCARTHY,
TRADEMARKS AND UNFAIR COMPETITION §§ 18:45.50, 18:46 (4th ed. 2016). Trademark
United Health Services‟ brief in opposition to UHS Delaware‟s motion
spans two docket entries. (Docs. 161-1 to -2). The same is true of UHS Delaware‟s
opposition brief. (Docs. 163-2 to -3). For ease of reference, citations to these briefs
are to the first docket entry only.
licensing agreements between a registrant and related parties, whether written or
implied, will avail the registrant of the Act‟s protections. See Doeblers‟ Pa. Hybrids,
Inc. v. Doebler, 442 F.3d 812, 824 (3d Cir. 2006).
UHS Delaware need not establish its own use of the trademarks to defend
them against infringement. It is sufficient to establish use by its licensee affiliates
and subsidiaries. UHS Delaware has submitted the affidavit of its associate general
counsel attesting that Universal‟s subsidiaries use both the „433 and „663 marks with
permission from UHS Delaware, pursuant to its healthcare management contracts
with the subsidiary entities. (Doc. 170, Ex. AA ¶¶ 2-3). This authorized use of the
„433 and „663 marks by parent and subsidiary corporations of UHS Delaware inures
to its benefit as owner of the marks. Consequently, the court rejects United Health
Services‟ assertion that UHS Delaware cannot establish “use” of the marks.
UHS Delaware’s Motion: Likelihood of Confusion
To prove likelihood of confusion, a plaintiff must demonstrate that, after
viewing both marks, consumers “would probably assume” that the products or
services bearing the marks share the same source. Checkpoint Sys., Inc. v. Check
Point Software Techs., Inc., 269 F.3d 270, 280 (3d Cir. 2001) (quoting Scott Paper Co.
v. Scott‟s Liquid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir. 1978), superseded on other
grounds by Shire US Inc. v. Barr Labs., 329 F.3d 348, 352 n.10 (3d Cir. 2003)), aff‟g
104 F. Supp. 2d 427 (D.N.J. 2000). Courts within the Third Circuit Court of Appeals
apply a familiar, nonexhaustive list of factors (the “Lapp factors”) to determine
whether there is a likelihood of confusion between competing marks:
(1) the degree of similarity between the owner‟s mark and
the alleged infringing mark; (2) the strength of the owner‟s
mark; (3) the price of the goods and other factors indicative
of the care and attention expected of consumers when
making a purchase; (4) the length of time the defendant has
used the mark without evidence of actual confusion arising;
(5) the intent of the defendant in adopting the mark; (6) the
evidence of actual confusion; (7) whether the goods, though
not competing, are marketed through the same channels of
trade and advertised through the same media; (8) the
extent to which the targets of the parties‟ sales efforts are
the same; (9) the relationship of the goods in the minds of
consumers because of the similarity of function; [and] (10)
other facts suggesting that the consuming public might
expect the prior owner to manufacture a product in the
defendant‟s market, or that he is likely to expand into that
Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983) (citing Scott Paper Co.,
589 F.2d at 1229). The inquiry is qualitative: no single factor is dispositive, and not
all factors are relevant in every case. See Checkpoint Sys., 269 F.3d at 280. As the
factors illustrate, likelihood of confusion is a decidedly fact-intensive issue. Courts
have thus cautioned that “summary judgment for either party is unlikely, absent a
particularly one-sided factual record.” 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F.
Supp. 2d 273, 285 (D.N.J. 2006); see also Country Floors, Inc. v. P‟ship Composed of
Gepner & Ford, 930 F.2d 1056, 1062-63 (3d Cir. 1991). We address the salient Lapp
Factor 1: Similarity of Marks
The Third Circuit Court of Appeals ranks similarity of marks as “the single
most important” of the ten Lapp factors. A&H Sportswear, 237 F.3d at 216 (citing
Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 476 (3d Cir. 1994)). Its
importance, however, does not render the factor dispositive. See Checkpoint Sys.,
269 F.3d at 281. Rather than a “side-by-side comparison,” the court must endeavor
to “move into the mind of the roving consumer” and ask whether the consumer—
encountering one of the two marks in isolation with only general recollection of the
other—would likely confuse the two. Id.; A&H Sportswear, 237 F.3d at 216. A court
measuring similarity must “compare the appearance, sound and meaning of the
marks.” Checkpoint Sys., 269 F.3d at 281 (citation omitted).
In considering a mark‟s appearance, courts look to “visual characteristics
such as the layout and format of lettering.” Harp, 984 F. Supp. 2d at 411-12 (citing
A&H Sportswear, 237 F.3d at 217). Courts measure the “sound” and “auditory
impressions” of a mark by examining the number of words and syllables employed
and the different (or similar) uses of those words and syllables. See id. “Meaning”
is determined by assessing whether the combination of words in each mark offers
“a different denotative or connotative meaning.” Id. at 413.
Defendants‟ UHS logo bears resemblance to UHS Delaware‟s „433 word mark
and „663 stylized mark against all sight, sound, and meaning metrics. The marks
contain the same three capitalized letters—UHS—separated by neither punctuation
nor spacing and accompanied by no other text. Each mark differs marginally in
style: UHS Delaware‟s stylized mark comprises three hollowed-out and rounded
letters with no attendant graphic, while United Health Services‟ logo displays a
solid, serif font accompanied by a small leaf graphic in the upper left region of its
letter “U.” The marks are otherwise indistinct. Read aloud, the marks produce
identical auditory impressions. As a result of their simplicity, neither mark evokes
a unique denotative or connotative meaning in isolation.
The record evidence concerning mark similarity is undisputed. There
exists near identity between the parties‟ marks. United Health Services effectively
concedes as much in its briefing, rejoining only that “[s]imilarity in name is only the
beginning of the analysis.” (Doc. 161-1 at 11-12). The first Lapp factor clearly favors
Factor 2: Strength of the Owner’s Mark
The strength of a mark is determined by both “distinctiveness or conceptual
strength” and “commercial strength.” Checkpoint Sys., 269 F.3d at 282. The first
prong assesses “inherent features” of the mark. Freedom Card, Inc. v. JPMorgan
Chase & Co., 432 F.3d 463, 472 (3d Cir. 2005). The second examines any “factual
evidence of marketplace recognition.” Id. The parties vigorously debate the
strength of UHS Delaware‟s marks against both criteria.
Courts evaluate conceptual strength on a four-part spectrum, ranging from
strongest to weakest: (1) arbitrary or fanciful; (2) suggestive; (3) descriptive; and
(4) generic. A&H Sportswear, 237 F.3d at 221. The strongest marks—designated
arbitrary or fanciful—generally do not describe or imply anything about their
associated product. See id. Arbitrary marks are “virtually indistinguishable” from
UHS Delaware maintains that, because the parties are “direct competitors,”
the court need look no further than the first Lapp factor in measuring likelihood of
confusion. UHS Delaware is correct insofar as the Third Circuit has held that when
“products are directly competing, and the marks are clearly very similar, a district
judge should feel free to consider only the similarity of the marks themselves.”
A&H Sportswear, 237 F.3d at 214. Nonetheless, as discussed infra, genuine
disputes persist for trial concerning the degree of overlap, if any, between plaintiff‟s
and defendants‟ respective target markets.
suggestive marks, except that the latter may “suggest a quality or ingredient of
goods” and require an element of consumer “imagination, thought, or perception.”
Checkpoint Sys., 269 F.3d at 282 (quoting Ford Motor Co. v. Summit Motor Prods.,
Inc., 930 F.2d 277, 292 n.18 (3d Cir. 1991)). Descriptive marks, by contrast, more
directly convey an idea of product ingredients, qualities, or characteristics. A&H
Sportswear, 237 F.3d at 222 (citation omitted). Marks in the generic category are
the weakest and function as a “common descriptive name of a product class.” Id.
Registered and incontestable trademarks are presumptively distinctive. See
CSC Holdings, LLC v. Optimum Networks, Inc., 731 F. Supp. 2d 400, 408 n.3 (D.N.J.
2010); First Keystone Fed. Sav. Bank v. First Keystone Mortg., Inc., 896 F. Supp.
456, 461 (E.D. Pa. 1995); but see Fancaster, Inc. v. Comcast Corp., 832 F. Supp. 2d
380, 416 (D.N.J. 2011). However, a mark‟s incontestable status does not preclude a
challenge of its strength. First Keystone, 896 F. Supp. at 461. Against a proven
senior user of the mark, incontestability is ultimately immaterial. See Marshak
v. Treadwell, 240 F.3d 184, 198 n.10 (3d Cir. 2001).
UHS Delaware maintains that its marks are conceptually strong independent
of incontestability. (See Doc. 155-2 at 19-20). It asserts that the marks are entitled
to the highest level of trademark protection as “arbitrary and fanciful” marks
because “there is no direct connection between „UHS‟ and the services provided
under the mark.” (Id. at 20). Defendants do not dispute this proposition. (See Doc.
161-1 at 12-17). Defendants instead rejoin that any conceptual strength the marks
may have in isolation is diluted by widespread third-party use of the “UHS” logo in
both medical services markets and beyond. (See id.)
Use or association of a mark with many different products in similar markets
weakens the mark‟s conceptual strength. See A&H Sportswear, 237 F.3d at 223.
Multiple uses in a narrow, relevant market are particularly probative, but extensive
use in “other markets” may also have a significant dilutive effect. Id. In A&H
Sportswear, for example, the Third Circuit rejected a district court‟s finding that
extensive use of the term “MIRACLE” in hosiery, children‟s wear, ready-to-wear,
and maternity wear categories did not undermine the strength of the MIRACLE
mark in the swimwear market. Id. at 223-24 (citing Sun Banks of Fla., Inc. v. Sun
Fed. Savings & Loan Ass‟n, 651 F.2d 311 (5th Cir. 1981)).
United Health Services identifies multiple third-party users of nearly
identical marks in related healthcare markets. Universal Hospital Services, Inc., is
the registered owner of the “UHS” word mark for medical equipment rentals. (Doc.
161, Ex. 40 at 1). Three major healthcare service providers employ nearly identical
stylized marks: UHS Surgical Services (a division of Universal Hospital Services,
Inc.); Unified Health Services; and Union Health Services, Inc. (Id. Ex. 42 at 2-4).
At least ten large universities adopt “UHS” as a mark for their school‟s healthcare
services providers. (Id. Ex. 41).
UHS Delaware remonstrates that defendants‟ list of third-party users lacks
sufficient geographic and industry context and that defendants have failed to prove
“enough” third-party uses of the mark. (Doc. 170-10 at 10-11). The court disagrees.
In resolving UHS Delaware‟s motion, we construe the evidence and all favorable
inferences drawn therefrom in United Health Services‟ favor. Viewed through this
lens, the court finds that the strength of UHS Delaware‟s marks is limited by
abundant employ of “UHS” acronyms throughout the healthcare industry. (See
Doc. 161, Exs. 40-42).
When measuring commercial strength, courts consider advertising
expenditures, sales volume, and purchasing trends. Harp, 984 F. Supp. 2d at 415.
These factual indicators serve as proxies to test the likelihood and extent of market
recognition. See id.; see also A&H Sportswear, 237 F.3d at 224. The court must
consider the extent of the registrant‟s efforts to promote and fortify the mark‟s
“commercial presence” through the prism of this evidence. See Checkpoint Sys.,
104 F. Supp. 2d at 458.
UHS Delaware highlights its advertising expenditures and sales volume as
evidence of commercial strength. (See Doc. 155-2 at 20-21). It asserts that UHS
Delaware has spent millions of dollars in advertising and promotion of its services
over the past two decades. (See id. at 20). UHS Delaware further observes that its
parent corporation, Universal, is a Fortune 500 company with an executive team
that is regularly recognized for industry accomplishments. (Id. at 21).
Our inquiry concerns strength of the mark, not overall strength of its
registered owner. UHS Delaware touts its advertising expenditures broadly but
offers no proof that those expenditures involved, concerned, or were an attempt to
promote the UHS marks. And UHS Delaware offers no supplemental evidence—
such as consumer perception surveys or focus groups establishing actual market
recognition—to support its commercial strength argument. Cf. Checkpoint Sys.,
104 F. Supp. 2d at 460. As the Third Circuit has noted, even evidence of significant
expenditures in connection with a mark “does not automatically translate into
consumer recognition.” A&H Sportswear, 237 F.3d at 224.
Despite the presumptive distinction of UHS Delaware‟s incontestable marks,
the Rule 56 record contains a dearth of evidence substantiating their commercial
strength. The dilutive effect of third-party usage clearly undermines the marks‟
overall strength. Consequently, this factor is neutral.
Factor 3: Care and Sophistication of Purchasers
The third Lapp factor acknowledges that likelihood of confusion decreases
when consumers exercise greater care in making purchasing decisions. Checkpoint
Sys., 269 F.3d at 284. When a product is expensive or complex, or the buyer class is
composed of professional purchasers, the likelihood of confusion decreases. Id.
(quoting Versa Prods. Co., Inc. v. Bifold Co. (Mfg.) Ltd., 50 F.3d 189, 204 (3d Cir.
1995)). Likewise, the more important a product is perceived to be, the more care a
consumer is presumed to exercise. Id. Per contra, lesser degrees of care attend
inexpensive products and services. Id. When a purchasing class is “mixed”—
composed of both average consumers and professional consumers—courts apply
the standard of care of “the least sophisticated consumer.” Versa Prods. Co., 50
F.3d at 205 (quoting Ford Motor Co., 930 F.2d at 293).
The record establishes that the customer base is in fact “mixed”: UHS
Delaware‟s senior vice president of business development testified that their base
includes healthcare industry members, medical and mental health practitioners,
professional referral sources, and ordinary patients. (Doc. 157, Ex. 10, Carothers
Evans Dep. 39:14-40:9, 74:19-75:3 (Jan. 14, 2016)). Such a widely varied consumer
class compels application of the least sophisticated consumer standard of care.
Versa Prods. Co., 50 F.3d at 205. However, in adopting this standard, we expressly
reject UHS Delaware‟s ipse dixit assertion that the “least sophisticated consumer”
consumer is necessarily “unsophisticated.” The record contains no support for the
assumption that an ordinary patient exercises little or no care in selecting medical
services. To the contrary, such important decisions doubtless trigger a heightened
standard of care in the ordinary consumer. This factor favors United Health
Services, albeit to a limited extent.
Factors 4 and 6: The Length of Use Without Actual Confusion
and Any Incidents of Actual Confusion
The fourth and sixth Lapp factors significantly overlap, and courts
routinely consider them together. Both factors task the court to consider whether
a “pattern of confusion” has emerged in the relevant product or service market.
Scott Paper Co., 589 F.2d at 1231. This inquiry is not concerned with “isolated
and idiosyncratic” examples of confusion between products or services. A&H
Sportswear, 237 F.3d at 227. Instances of confusion of limited scope may be
“dismissed as inconsequential or de minimis.” 4 MCCARTHY, supra, at § 23:14. The
fourth factor acknowledges that marks which have coexisted without confusion for
years are less likely to cause consumer confusion in the future. Harp, 984 F. Supp.
2d at 416 (quoting Versa Prods. Co., 50 F.3d at 204-05). This inference strengthens
the longer the challenged marks have been in use. Versa Prods. Co., 50 F.3d at 205.
UHS Delaware relies on the following as evidence of actual confusion:
An email dated May 18, 2010 wherein Boyd observes to a colleague that
“there are a few UHSs out there” and “we sometimes get e-mails and
inquiries meant for them.” (Doc. 157, Ex. 41).
Boyd‟s testimony concerning a CNBC broadcast in November 2010 in
which defendants‟ logo was displayed on screen while plaintiff‟s chief
executive officer was speaking about Universal. (See Boyd 30(b)(6) Dep.
Testimony of three of defendants‟ officers that both UHS Delaware and
United Health Services employees received telephone calls and other
communications meant for the other. (Doc. 155 ¶ 13; Doc. 155-2 at 18-19).
Boyd‟s testimony that, in 2013, a subordinate reported to her that a news
report had run in Binghamton, New York, wherein a reporter erroneously
referred to a United Health Services facility as a Universal facility in both
online and on-air stories. (Boyd 30(b)(6) Dep. 130:8-131:11).
A “Tweet” dated April 12, 2015, wherein a Twitter user included United
Health Services‟ Twitter handle when referencing Universal.7 (Doc. 157,
Testimony of a Universal employee concerning a misdirected email
received from Healthgrades on March 12, 2015, regarding a potential
award to defendants‟ Wilson hospital. (Doc. 157, Ex. 15, Mary Ann Ninnis
Dep. 88:11-89:22 (Jan. 14, 2016)).
An April 2, 2016 billing dispute letter addressed to “United Health
Services” but mailed to both United Health Services and to Universal.
(Doc. 170, Ex. AA at 41).
UHS Delaware refers to a second Tweet, purportedly dated July 26, 2013,
which misidentified Universal‟s chief executive officer as being associated with
United Health Services. (See Doc. 155-2 at 19 (citing Doc. 157, Exs. 44, 46)). The
cited exhibits are duplicate copies of the April 12, 2015 Tweet. (See Docs. 157, Exs.
44, 46). Hence, the court does not consider the alleged but unproven July 26, 2013
United Health Services argues that this evidence is both inadmissible and
irrelevant. (Doc. 161 ¶ 13; Doc. 161-1 at 20-21). The court addresses United Health
Services‟ evidentiary objection first.
Historically, accounts of customer conversations with subordinate employees
have been met with successful hearsay objections. See, e.g., Versa Prods. Co., 50
F.3d at 212. However, in Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700 (3d
Cir. 2000), the Third Circuit changed course in exploring objections similar to those
lodged by defendants.8 The circuit panel observed that the first level of hearsay—
customer statements to employees evincing confusion—are not hearsay because
they are submitted for their falsity rather than their truth. Id. at 719. It is the
second level of hearsay—statements by employees to the deponent describing
telephone calls—that must satisfy an exception to the hearsay rule. See id. Even if
the second-level statement fails to meet an exception, a witness may acknowledge
receipt of subordinate reports of confusion. Id.
UHS Delaware relies exclusively on the court‟s first-level hearsay analysis
without identifying an exception for admitting the second-level hearsay statements.
UHS Delaware posits that Kos Pharmaceuticals authorizes blanket admission of
any and all confusion evidence based on its purported falsity. (See Doc. 170-10 at
13-14). This contention misreads the Third Circuit‟s decision. Absent an exception
authorizing admission of the second-level statements, testimony concerning the
content of subordinate conversations with customers is inadmissible hearsay. See
The court offered its analysis in a preliminary injunction posture, where the
Rules of Evidence are relaxed, but noted that its rationale would apply with equal
force at trial and in the Rule 56 context. Kos Pharms., 369 F.3d at 719.
Kos Pharms., 357 F.3d at 719. Officers may permissibly testify to the fact that they
received reports of confusion from their employees, but the hearsay rule prohibits
any substantive recount of underlying conversations.9 Id.
Assuming admissibility arguendo, the record evidence falls short of
establishing a pattern of actual confusion. UHS Delaware asserts that instances
of confusion began after United Health Services‟ rebranding rollout in June 2010.
(Doc. 155 ¶ 13). To support this proposition, UHS Delaware cites to Boyd‟s email
acknowledging that “we sometimes get e-mails and inquiries meant for” entities
with similar names; the email is dated May 18, 2010, a month before implementation
of the new logo. (See Doc. 157, Ex. 41 at 2). As for the CNBC interview associating
defendants‟ logo with Universal‟s CEO, that error may just as likely have derived
from the incredible irony that both companies‟ CEOs shared the name “Alan
Miller.” (See Boyd 30(b)(6) Dep. 141:14-142:12). The cited evidence simply does not
have the dispositive force suggested by UHS Delaware.
Moreover, instances of confusion cited by UHS Delaware are few and far
between, representing nothing more than “isolated and idiosyncratic” incidents.
The excluded testimony would not tip the balance in UHS Delaware‟s
favor. No reported conversation establishes context, timing, or other information
which might evince actual confusion from the respective marks. Anecdotal
evidence of misdirected telephone calls or letters is usually insufficient to prove
actual confusion, particularly when the communications are relayed by interested
employees and do not concern the purchase of products or services. See, e.g., Scott
Paper, 589 F.2d at 1231; Inc. Publ‟g Corp. v. Manhattan Magazine, Inc., 616 F. Supp.
370, 388-89 (S.D.N.Y. 1985), aff‟d without op., 788 F.2d 3 (2d Cir. 1986). We are
cautioned to view such employee-provided reports “with skepticism,” as they often
“tendto be biased or self-serving.” Citizens Fin. Grp., Inc. v. Citizens Nat‟l Bank of
Evans City, 383 F.3d 110, 122 (3d Cir. 2004) (citing Checkpoint Sys., 269 F.3d at 298;
A&H Sportswear, 237 F.3d at 227).
A&H Sportswear, 237 F.3d at 227. As purported concrete evidence of confusion,
UHS Delaware identifies a single Tweet, an error in a local news report, a
misdirected email from an industry professional, and one billing dispute letter.
Measured against more than six years‟ use of similar marks, the incidents identified
by UHS Delaware are negligible.
The court cannot find, at this juncture, that UHS Delaware has proven a
pattern of confusion as a matter of law. The actual confusion factor weighs in favor
of United Health Services.
Factor 5: Intent of the Defendant
The intent factor examines whether the defendant actually intended to
confuse consumers by adopting a mark resembling the plaintiff‟s mark. See A&H
Sportswear, 237 F.3d at 225-26 (citing Versa Prods. Co., 50 F.3d at 205-06). The
mark owner must demonstrate an intent to confuse; an “intent to copy, without
more,” will not suffice. Id. Mere carelessness, as opposed to deliberate intent,
will not resolve this factor in the owner‟s favor. Id. at 232-33. Similarly, “mere
knowledge” of a competing mark is insufficient to prove intent to confuse.
Fancaster, 832 F. Supp. 2d at 418.
UHS Delaware avers that United Health Services adopted the new marks
with an intent to trade on Universal‟s goodwill. As support, UHS Delaware cites
to: (1) Boyd‟s May 18, 2010 email and (2) evidence that defendants‟ officers receive
trade journals and publications in which Universal advertises. (Doc. 155-2 at 22-23).
The cited evidence establishes nothing more than a potential awareness of
Universal‟s presence in the general healthcare marketplace. Universal‟s vice
president of advertising conceded that any suggestion of defendants‟ intentions is
pure speculation. (See Ninnis Dep. 75:4-77-16). Plaintiff cannot divine whether
defendants purposefully sought to trade on Universal‟s good will. (Id.) In fact, UHS
Delaware acknowledges that United Health Services‟ stated objective was, at least
in part, to distinguish itself from competitors such as United Healthcare and
Universal Health System. (Doc. 155-2 at 23).
There is no evidence of bad faith on the part of United Health Services, and
this factor weighs against UHS Delaware.
Factors 7 and 8: Evidence of Shared Marketing and
Advertising Channels and Targets
The seventh and eighth Lapp factors assess the existence and degree of
overlap among the parties‟ trade channels and target markets. When parties target
their sales efforts to the same consumer base, the likelihood of confusion increases.
Checkpoint Sys., 269 F.3d at 289. Similarly, although “perfect parallelism will
rarely be found,” A&H Sportswear, 237 F.3d at 225, significant overlap between
marketing and advertising channels correlates to greater likelihood of confusion.
Checkpoint Sys., 269 F.3d at 288-89 (quoting Axciom Corp. v. Axiom, Inc., 27 F.
Supp. 2d 478, 502 (D. Del. 1998)). To this end, we must consider the class of
customers to whom goods and services are marketed, the manner in which those
products are advertised, and the channels through which they are sold. See id.
Each of these inquiries is “intensely factual.” Id. at 289.
There is no genuine dispute concerning overlap in manner of advertisement.
Both systems advertise hospital and healthcare services through print, online, and
television media. (Doc. 155 ¶¶ 2, 12; see Doc. 161-5 ¶¶ 2, 12). But the parties agree
on little else. UHS Delaware asserts that the parties‟ target markets and channels
of communication are “virtually identical.” (Doc. 155-2 at 24-25). A UHS Delaware
witness reported that its affiliates run articles in national publications such as the
New York Times, the Wall Street Journal, and Fortune Magazine which ostensibly
reach New York residents. (Ninnis Dep. 104:8-105:4). However, its employees
noted that, beyond the incidental reach of national, subscription-based media,
neither Universal nor its affiliates undertake specific efforts to “target New York
consumers.” (See Doc. 161, Ex. 2, Margaret Care Dep. 81:17-82:20, 85:10-18 (Jan. 12,
2016); see also Ninnis Dep. 69:18-70:11).
As it concerns UHS Delaware‟s customer base, the record reflects that UHS
Delaware‟s affiliated behavioral health facilities in Pennsylvania have treated New
York residents. Those residents comprise less than one percent of the patient pool,
with a singular exception. (Doc. 161-5 ¶ 2 at 11-12). In 2014, four percent of patients
treated on an outpatient basis at Foundations Behavioral Health, a UHS Delaware
affiliate located in Doylestown, Pennsylvania, were New York residents. (Id.) A
corporate representative for UHS Delaware testified that Foundations operates a
“high-functioning acute care residential unit for adolescents” which has a “very
targeted” referral program relationship with certain New York state agencies.
(Evans Dep. 41:16-42:13, 45:7-18).
Witnesses testified that, although UHS Delaware does not have a brick and
mortar presence in New York state where United Health Services operates, its
affiliates serve patients from across the country, including New York residents.
(Doc. 157, Ex. 9, Frank Lopez Dep. 22:5-23, 28:6-18, 53:17-54:3, 105:22-107:13 (Jan. 15,
2016); Evans Dep. 32:2-33:4, 38:19-44:3). UHS Delaware notes that “snowbirds”—
residents of New York who travel south for the winter months—visit its Wellington
Regional Medical Center (“Wellington”) in West Palm Beach, Florida, as needed on
holiday. (Lopez Dep. 22:5-23). In addition, its affiliates in Las Vegas “quite often
see individuals that reside in New York . . . because of the tourism traffic.” (Id.
106:3-9). UHS Delaware also identifies one full-time New York resident who travels
to Wellington from New York for treatment with a nationally-renowned physician.
(See id. 28:6-25).
UHS Delaware‟s assertion that its affiliates share “virtually identical” target
markets and customer bases with United Health Services is presently unsupported.
The court cannot ascertain from the record whether the cited examples of overlap
derive from UHS Delaware‟s marketing efforts and consumer brand recognition,
or the sheer happenstance of New York residents requiring hospital services on
vacation. As a result, the seventh and eighth factors are largely a wash. The jury,
not the court, must weigh the parties‟ opposing characterizations of their respective
advertising efforts and target markets. We cannot resolve either factor in favor of
UHS Delaware at this juncture.
Factor 9: Relationship of the Goods in the Minds of
The ninth factor tasks the court to consider whether the marks and their
associated services are “similar enough that a consumer could assume they were
offered by the same source.” Kos Pharms., 369 F.3d at 723 (quoting Fisons, 30 F.3d
at 481). The court has already determined that the marks are quite similar and may
confuse average consumers. Hence, our inquiry is simply whether the services
provided under those marks are so similar that a consumer “might . . . reasonably
conclude that one company would offer both.” Checkpoint Sys., 269 F.3d at 286
(quoting Fisons, 30 F.3d at 481).
United Health Services concedes that both health systems offer a variety of
hospital and healthcare services, including, inter alia, emergency medicine, general
surgery, long-term care, physical therapy and rehabilitation, alcohol and substance
abuse treatment, and psychiatric services. (Doc. 153 ¶¶ 5-14; Doc. 155-2 at 26; see
also Doc. 157, Ex. 27 at 2-12). United Health Services posits that a “professional”
purchaser of healthcare services would not mistakenly believe that the services
emanate from the same source. (Doc. 161-1 at 25). However, the ninth Lapp factor
does not address purchaser sophistication; rather, the question is simply “how
similar, or closely related, the products are.” Kos Pharms., 369 F.3d at 722-23.
The answer is “very similar.” Consequently, this factor favors UHS Delaware.
Factor 10: Likelihood of Expansion
The tenth factor considers “other facts” from which a consumer might expect
that the trademark owner, through expansion or otherwise, is affiliated with the
alleged infringer. See Fisons, 30 F.3d at 480. The inquiry is “highly contextdependent.” Kos Pharms., 369 F.3d at 724. Courts should consider “the nature of
the products or the relevant market” and “the practices of other companies in the
relevant fields.” Id.
UHS Delaware summarily claims that the average consumer “could
reasonably expect” UHS Delaware to be the source of defendants‟ services in New
York. (Doc. 155-2 at 26-27). United Health Services answers that neither UHS
Delaware nor any of its affiliates have plans to expand to New York, nor could they:
New York law prohibits for-profit corporations like UHS Delaware and Universal
from operating healthcare facilities in the state. (Doc. 161-1 at 26; Lopez Dep. 124:320, 125:23-126:1). There is no record indication that consumers would be aware of
this legal nuance. Accordingly, the court finds that this factor is neutral.
Balancing the Factors
UHS Delaware has not made the requisite showing to obtain judgment as a
matter of law. Mark similarity is the only compelling factor signaling a likelihood of
confusion. The ninth factor—similarity of services—appears to be undisputed and
favors UHS Delaware, but absent contextual evidence that the parties operate in
overlapping spheres, the weight of this factor is minimal.
By virtue of their inherent distinctiveness, the UHS marks are, in isolation,
conceptually strong. That inceptive strength is diluted by multiple similar uses
within related markets. The remaining factors are either neutral or favor United
Health Services: UHS Delaware offers no evidence substantiating the professed
commercial strength of its marks, nor has it proven that United Health Services
intended or has achieved consumer confusion. UHS Delaware‟s failure to
substantiate the weighted balance of the Lapp factors is fatal to its Rule 56
pursuit. The court will deny UHS Delaware‟s motion for summary judgment.10
United Health Services’ Motion: Junior User Defense
Federal registration of a trademark does not extinguish existing rights that
other users have acquired under common law. See 5 MCCARTHY, supra at § 26:53;
see also 15 U.S.C. §§ 1115(b)(5), 1065. Even when a mark achieves incontestable
status, senior users of the mark enjoy an exception to incontestability and a defense
to an infringement action. Marshak, 240 F.3d at 198 n.10; 5 MCCARTHY, supra at
§ 26:53. To sustain this defense, a party charged with infringement must prove that
its own mark “has been continuously used by such party or those in privity with
him from a date prior to . . . the registration of the mark” in question. 15 U.S.C.
§ 1115(b)(5). Prior use protection extends only to the “areas where the prior user
has established a market for its goods.” Nat. Footwear Ltd. v. Hart, Schaffner
& Marx, 760 F.2d 1383, 1395 (3d Cir.), cert. denied, 474 U.S. 920 (1985).
United Health Services maintains that its “UHS” mark has been in
continuous use in the state of New York since at least 1982. (Doc. 152 at 12-13).
John Carrigg (“Carrigg”), executive vice president and chief operating officer of
The court concludes infra that disputes of fact remain as to United Health
Services‟ junior user defense and will deny UHS Delaware‟s request for summary
judgment on that particular defense on the merits. The court declines to address
UHS Delaware‟s motion on United Health Services‟ remaining affirmative defenses
in light of the conclusory nature of UHS Delaware‟s argument. The court does not
address UHS Delaware‟s request for judgment on its contributory infringement
claim against United Health Services as that claim is fully derivative of its
underlying substantive charges.
both United Health Services and United Health Services Hospitals, Inc., explains
that, in 1981, the Binghamton and Wilson hospitals merged and became “known
in the community as part of UHSI.” (Doc. 153, Ex. A ¶ 3). Carrigg concedes that
“UHSI was not the only name used to describe the health care system over the
years,” observing that it has been referred to as both “United Health Services,
Inc.,” and by “the UHS name.” (Id.)
The record establishes that defendants used “UHS” in a handful of internal
documents, beginning with a 1982 employee newsletter titled “UHS Life.” (Doc. 153
¶ 17). Defendants distributed subsequent versions of the newsletter, retitled “The
UHS News,” in May 1983, July/August 1983, November 1984, December 1984,
March 1985, Fall/Winter 1989, and Summer 1990. (Id.) “UHS” appears in a 1990
annual report, a 1991 pamphlet advertising childbirth classes to the public, a 1991
“Report to the Community,” and a “1991 Annual Review.” (Id. ¶¶ 18-19).
Defendants identify several newspaper clippings from the 1980s and early 1990s
that reflect third-party use of the term “UHS” during that time. (See id. ¶ 22).
In 1990 or 1991, the Binghamton and Wilson hospitals erected “monument
signs” at their respective entrances. (Id. ¶ 20). Both signs display a large “United
Health Services” seal, followed by the name of each hospital. The seal and hospital
name dominate each sign but are followed by subscript reading: “United Health
Services Hospitals” and “A Member of the UHS Health Care System.” (See Doc.
153-3 at 46, 66-67). The monument signs were removed in 2012 following the 2010
rebranding initiative. (Doc. 153 ¶ 20). To corroborate continued use throughout the
mid-1990s, defendants point to 1993 and 1995 community service reports and a
March 1997 “Health Care 100” listing, each referencing the “UHS Health Care
System.” (Id. ¶¶ 23-24). Defendants have used their registered domain name—
www.uhs.net—since 1997. (Id. ¶ 25).
UHS Delaware does not debate United Health Services‟ early use of the
phrase “UHS.” (See Doc. 163-1). UHS Delaware contends only that United Health
Services deliberately abandoned its association with the “UHS” mark in 1997 when
it adopted the “UnitedHealth Services” logo system wide. (See Doc. 163-2 at 8-18).
UHS Delaware maintains that defendants adopted the new logo with deliberate
intent to abandon prior marks. (Id.) United Health Services‟ junior user defense
thus rises or falls on a discrete inquiry: whether United Health Services
continuously used the mark since 1982 or effectively abandoned the mark following
the system‟s rebranding initiative in June of 1997.
The Lanham Act provides that a mark is deemed abandoned when “its use
has been discontinued with intent not to resume such use.” 15 U.S.C. § 1127. Intent
to abandon may be inferred from circumstantial evidence. Id. The statute requires
proof both of “acts indicating practical abandonment” as well as “an actual intent to
abandon.” Marshak, 240 F.3d at 198 (quoting Saxlehner v. Eisner & Mendelson Co.,
179 U.S. 19, 31 (1900)). Hence, to prove abandonment, a party must establish two
elements: discontinued use of the mark and intent to abandon by the common law
“Use” in this context means “the bona fide use of such mark made in the
ordinary course of trade, and not made merely to reserve a right in the mark.” 15
U.S.C. § 1127. The Third Circuit construes “continued use” to mean “continuous
use of the mark in connection with . . . commercial exploitation.” Id. at 199; Warren
Publ‟g Co. v. Spurlock, 645 F. Supp. 2d 402, 440 (E.D. Pa. 2009). The “residual” or
“nominal” use of a mark will not suffice to avoid abandonment. Warren Publ‟g Co.,
645 F. Supp. 2d at 440 (quoting Kusek v. Family Circle, Inc., 894 F. Supp. 522, 533
(D. Mass. 1995)). The cited use must be “deliberate” rather than “sporadic, casual,
or transitory.” Goldfaden v. Miss World (Jersey) Ltd., No. 02-712, 2005 WL 1703207,
at *7 (D.N.J. July 20, 2005) (quoting La Societe Anonyme des Parfums Le Galon v.
Jean Patou, Inc., 495 F.2d 1265, 1271-72 (2d Cir. 1974)); Kusek, 894 F. Supp. at 533
Following its rebranding initiative in 1997, United Health Services took no
action to continue commercial exploitation of the “UHS” mark. What is more, the
new corporate identity policy prohibited any “variation” from the replacement
logo. (Doc. 157, Ex. 47 at 4). Such unequivocal name changes may constitute mark
abandonment. See 3 MCCARTHY, supra at § 17:11. Boyd seeks to temper the policy
statement by suggesting that it means no variation to the form of the new mark
rather than no variation from use. (See Boyd 30(b)(6) Dep. 63:7-25). This testimony
is contradicted by Boyd‟s subsequent characterization of all residual uses of “UHS”
as “rogue” advertising. (See id. 86:4-23).
Nor does a vestigial reference to “UHS Health Care System” on the entrance
signs at the Wilson and Binghamton hospitals constitute sufficient “continuing use”
within the Lanham Act. No United Health Services representative testified that the
signs were maintained in an attempt to commercially exploit the mark; a jury could
just as easily conclude that the “monument” references remained because of
budgetary constraints, apathy, or lack of consequential oversight. Both of
these signs constitute “residual” employ of a mark which does not foreclose an
abandonment finding. See Warren Publ‟g Co., 645 F. Supp. 2d at 440 (quoting
Kusek, 894 F. Supp. at 533).
United Health Services‟ reliance on its website URL—which contains the
“UHS” acronym—is similarly unavailing. The summary judgment record is devoid
of documentary evidence or testimony demonstrating an intent to establish United
Health Services‟ URL as a trademark. As McCarthy observes, a domain name may
“become a trademark only if it is used as a trademark.” 5 MCCARTHY, supra at
§ 25A:18 (emphasis added). Absent proof that defendants intended the domain
name itself to identify the source of services and not merely defendants‟ location
on the internet, the domain name alone does not constitute “use” of a mark. See
id.; see also Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949, 956
(C.D. Cal. 1997).
Isolated newspaper references to “UHS” also fail to establish continued use.
United Health Services identifies 14 news reports referring to “UHS” between April
2005 and December 2009. (Doc. 153-4, Ex. 2). Most of the articles include “UHS” in
headlines and refer first to “United Health Services” or “United Health Services
Hospitals” in text before adopting the shorthand acronym throughout. (See id. at
20, 22, 23, 24, 25, 27, 32). United Health Services argues that this third-party usage
inures to its benefit for purposes of preserving a mark otherwise deserted by its
corporate marketing policy. (See Doc. 168 at 5 n.3).
The court rejects defendants‟ intimation that third-party use of an
abandoned mark should preserve the owner‟s rights therein. The cases identified
for this proposition found independent commercial use of the mark by the owner
in addition to significant third party usage within the relevant industry. See Nat‟l
Cable Television Ass‟n, Inc. v. Am. Cinema Editors, Inc., 937 F.2d 1572, 1577-78
(Fed. Cir. 1991); Diarama Trading Co., Inc. v. J. Walter Thompson U.S.A., Inc., No.
01-2950, 2005 WL 2148925, at *7 (S.D.N.Y. Sept. 6, 2005). United Health Services
identifies no authority suggesting that unsolicited third-party references will
eternize an owner‟s rights in an intentionally-abandoned mark. To hold that such
references constitute sufficient owner “use” to forestall abandonment would negate
the requirement of deliberate commercial exploitation. See Marshak, 240 F.3d at
199; Warren Publ‟g Co., 645 F. Supp. 2d at 440; Goldfaden, 2005 WL 1703207, at *7.
UHS Delaware presents ample countervailing evidence to establish genuine
disputes on this issue. UHS Delaware‟s probata demonstrates that, following the
1997 rebranding initiative, the new “UnitedHealth Services” mark comprehensively
ousted “UHS” as defendants‟ master brand. From 1997 through 2010, defendants‟
website displayed the “UnitedHealth Services” mark. (Boyd 30(b)(6) Dep. 96:12-15).
Defendants used their new mark on weekly employee newsletters, in a Stay Healthy
periodical, on annual reports, and in advertisements during that time period. (Id.
70:15-76:19, 79:5-82:18, 99:4-102:23, 108:22-110:7). When United Health Services‟
CEO introduced the rebranding initiative in 2010, he observed that “UHS” is a
“new name” designed to allow the public to think of “one set of initials rather than
as a three-word description.” (Doc. 157, Ex. 61 at 2 (emphasis added)). This
evidence squarely demonstrates that both defendants and the public previously
perceived the “UnitedHealth Services” logo as the system‟s exclusive brand. (Id.)
Construing the Rule 56 record in favor of UHS Delaware, the court is
compelled to deny United Health Services‟ motion on junior user grounds. A
reasonable juror could find, based on the record in toto, that United Health Services
deliberately abandoned the “UHS” mark in favor of the “UnitedHealth Services”
master brand. It is for the jury and not the court to resolve this abandonment
United Health Services’ Motion: Unfair Competition and the Impact
United Health Services also seeks summary judgment as to UHS Delaware‟s
unfair competition claims under § 1125(a) of the Lanham Act. This statutory section
“creates two distinct bases of liability: false association, § 1125(a)(1)(A), and false
advertising, § 1125(a)(1)(B).” Lexmark Int‟l, Inc. v. Static Control Components, Inc.,
572 U.S. __, 134 S. Ct. 1377, 1384 (2014). UHS Delaware asserts only the former
In Lexmark, the Supreme Court explored the scope of the statutory remedy
available under § 1125(a)(1) and recalibrated the class of plaintiffs authorized by
Congress to sue thereunder. Lexmark Int‟l, Inc., 134 S. Ct. at 1387. The Court held
that the breadth ex facie of § 1125(a) is tempered by two judicial considerations: the
statutory zone of interests and proximate cause. See id. at 1388. To fall within the
Lanham Act‟s zone of interests, the plaintiff must prove “an injury to a commercial
interest in reputation or sales.” Id. at 1390. To demonstrate proximate cause, the
plaintiff must establish “economic or reputational injury flowing directly from the
deception wrought” by the defendant. Id. at 1391. The Court summarized its test
as follows: to maintain a cause of action under § 1125(a), “a plaintiff must plead (and
ultimately prove) an injury to a commercial interest in sales or business reputation
proximately caused by the defendant‟s misrepresentations.” Id. at 1395.
Two years ago, this court assumed without strictly deciding that Lexmark
would apply with equal force to false advertising and false association claims. See
Advanced Fluid Sys., Inc. v. Huber, 28 F. Supp. 3d 306, 332-33 (M.D. Pa. 2014). In
the interim, three more district courts have also presumed that Lexmark applies
broadly to all § 1125(a) claims. See Martin v. Wendy‟s Int‟l, Inc., No. 15-6998, 2016
WL 1730648, at *4-5 (N.D. Ill. 2016); Lundgren v. Ameristar Credit Sols., Inc., 40 F.
Supp. 3d 543, 551 n.4 (W.D. Pa. 2014); Ahmed v. Hosting.com, 28 F. Supp. 3d 82,
90-91 (D. Mass. 2014). The only court to address the question unequivocally held
that Lexmark embraces both types of claims. See Int‟l Found. of Emp. Ben. Plans,
Inc. v. Cottrell, No. 14-1269, 2015 WL 127839, at *3 (D. Md. 2015).
We agree with the ratio decidendi of the Cottrell court in resolving that
Lexmark applies to UHS Delaware‟s false association claims sub judice. The Court
in Lexmark employed broad language in framing its inquiry, speaking to what “a
plaintiff suing under § 1125(a) ordinarily must show” and the “right to sue under
§ 1125(a),” without distinguishing between the statute‟s constituent causes of action.
Lexmark, 134 S. Ct. at 1388-91. The Court also observed that “[m]ost of the [Act‟s]
enumerated purposes are relevant to false-association cases.” Id. at 1399. We will
not assume that these choices were arbitrary. The court holds that Lexmark‟s zone
of interest and probable cause requirements extend to false association claims
under 15 U.S.C. § 1125(a)(1)(A).
Lexmark requires an unfair competition plaintiff to “ultimately prove . . .
an injury to a commercial interest in sales or business reputation.” Lexmark,
134 S. Ct. at 1395. UHS Delaware submits no evidence substantiating such injury.
UHS Delaware purposefully elected not to pursue such evidence, having “agreed
to withdraw its claim for recovery of actual damages” and otherwise noting that
“[d]amage to [its] business, trade, reputation, and goodwill, as well as diverted sales
. . . are not calculable without undue burden and expense.” (Doc. 153 ¶¶ 31-32).
This deficit of proof necessarily precludes any assessment of proximate cause.
Rule 56 tasks a non-moving party to respond with proof in support of its
claims. UHS Delaware fails to do so. As such, the summary judgment record is
devoid of any evidence of lost or decreased sales, diminished goodwill, or other
injury proximately caused by defendants. See Lundgren, 40 F. Supp. 3d at 551;
see also Ahmed, 28 F. Supp. 3d at 91. The court will grant United Health Services‟
motion as to the § 1125(a) false association claim. The court will also grant
summary judgment on the state common law unfair competition claims, which
are necessarily dependent upon the success of the federal claims. See R.J. Ants,
Inc. v. Marinelli Enters., LLC, 771 F. Supp. 2d 475, 489 (E.D. Pa. 2011).
The extant factual disputes sub judice are manifold and material. The court
will grant United Health Services‟ motion as to UHS Delaware‟s unfair competition
claims in Count II and IV. The court will otherwise deny both parties‟ Rule 56
motions and set this matter for trial. An appropriate order shall issue.
/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania
December 29, 2016
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