Unity Health Plans Insurance Corporation v. Iowa Health System
Filing
93
OPINION AND ORDER granting 5 Motion for Preliminary Injunction Signed by District Judge William M. Conley on 2/5/14. (jat)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
UNITY HEALTH PLANS INSURANCE
CORPORATION,
Plaintiff,
OPINION & ORDER
v.
13-cv-845-wmc
IOWA HEALTH SYSTEM d/b/a
UNITYPOINT HEALTH,
Defendant.
In this trademark infringement action, plaintiff Unity Health Plans Insurance
Corporation (“Unity Health”) seeks injunctive relief against defendant Iowa Health System,
which began the process of rebranding itself in early March of 2013 as UnityPoint Health
(generally identified in the remainder of this opinion by the name under which it now does
business, “UnityPoint”). Even though both Unity Health and UnityPoint are in the health
care market, the latter’s name change was not an issue initially because the companies’
geographic markets (Southwestern Wisconsin and Iowa/Illinois respectively) did not
overlap.
This changed dramatically on January 1, 2014, when UnityPoint finalized its
affiliation with Meriter Health Services (“Meriter”) and instantly became a health care
provider in the southwestern Wisconsin healthcare market, where Unity Health had already
established a presence. That affiliation proved the catalyst for this lawsuit, in which Unity
Health seeks to enjoin defendant’s use of the UnityPoint name within Unity Health’s
principal marketplace, which consists of twenty counties located in southwestern
Wisconsin. Specifically, Unity Health alleges that UnityPoint has violated § 43(a) of the
Lanham Act by infringing its claimed common law rights in the trademark “UNITY.”
Currently before the court is Unity Health’s motion for a preliminary injunction.
(Dkt. #5.) On January 27, 2014, the court held a hearing on that motion, which it will
now grant in part and deny in part for the reasons set forth below.
ALLEGATIONS OF FACT1
I. The Parties
Plaintiff Unity Health is a Wisconsin insurance corporation with its principal place
of business in Sauk City, Wisconsin. Unity Health is an “HMO insurer” as defined by Wis.
Stat. § 600.03(23c), which requires it to offer an adequate health care provider network
within a designated 20-county marketplace located in southwest Wisconsin (the “Unity
Health Territory”).2 In essence, this market comprises all of southern Wisconsin outside of the
Greater Milwaukee area and surrounding counties as reflected by the shaded area of the
following Wisconsin map.
1
UnityPoint purports to dispute many of Unity Health’s proposed findings of fact, but several
of the disputes hinge not on contradictory evidence but instead on its own assertions that Unity
Health’s evidence, such as the declaration of Unity Health’s President and CEO Terry Bolz, is
insufficient to prove certain points. These ostensible “disputes” do not comply with this court’s
procedures on motions for injunctive relief, which: (1) permit the moving party to rely upon
affidavits for admissible factual propositions personally known to the affiant, and (2) require the
responding party to cite with precision to the evidentiary matter or the testimony to be
presented at the hearing that will refute the factual proposition. Accordingly, the court deems
many of those facts undisputed for purposes of plaintiff’s preliminary injunction motion.
2
These counties are Dane, Crawford, Grant, Iowa, Lafayette, Green, Rock, Walworth, Jefferson,
Dodge, Columbia, Sauk, Richland, Vernon, Juneau, Adams, Waushara, Marquette, Green Lake
and Fond du Lac. (See Bolz Affidavit (dkt. #6) ¶ 36.)
2
Unity Health’s insurance business depends on managing the continuity, quality and
compliance of covered healthcare services within this geographic market.
Defendant Iowa Health Systems, doing business as UnityPoint Health, is an Iowa
non-profit corporation with its principal place of business in Des Moines, Iowa. Initially
formed in 1994, UnityPoint provides similar health insurance coverage through integrated
clinics, hospitals, home care and hospice care on a regional basis in Iowa, Illinois and now
southwestern Wisconsin.
II. Unity Health’s History
Unity Health Insurance was formed in 1995 through the merger of two relatively
small health care providers in the Southwest Wisconsin marketplace, U-Care and HMO of
Wisconsin.
This merged entity first operated as “Unity Health Plans Insurance
Corporation” and was owned by BlueCross BlueShield of Wisconsin. In 2003, that entity
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was acquired by WellPoint. In 2005, it became a wholly-owned subsidiary of University
Health Care, Inc. (“UHC”) and an affiliate of the University of Wisconsin Hospitals and
Clinics Authority (“UWHC”) and the University of Wisconsin Medical Foundation
(“UWMF”). In the Wisconsin marketplace, UHC, UWHC and UWMF are jointly known
as “UW Health.”
Unity Health has used three different logos since its formation. Those logos are:
As a UHC subsidiary, one of Unity Health’s strategic goals is to incent its memberinsureds to use UW Health facilities and doctors by making UW Health its preferred health
care provider, although Unity Health Insurance is also accepted by some providers other
than UW Health. For example, Unity Health has a contractual relationship with Meriter,
placing some of Meriter’s services like maternity services within Unity Health’s preferred
network. Some UW Health doctors also have admission privileges at Meriter Hospital,
which is one of three major regional hospital groups based in Madison, Wisconsin (along
with UWHC and St. Mary’s Hospital).
Over the past five years, Unity Health spent approximately 3.6 million dollars on
marketing and advertising, including the use of radio, television, newspaper and internet.
For example, it has advertised on WISC TV and WKOW TV, the Madison-based affiliates
of CBS and ABS, respectively. Consistent with the most recent of Unity Health’s three
logos above, Unity Health refers to its affiliation with UW Health on its website,
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www.unityhealth.com, and in its promotional materials. The website also provides a tool to
search for medical providers, information regarding pharmaceuticals and access to the
MyChart portal that serves Unity Health members and UW Health patients.
In 2006, Unity Health conducted market research to assess “[r]ecall/recognition of
Unity Health and other competitive health plans,” the “[a]wareness of Unity and other
health plan advertising,” and the “[r]ecall and believability of advertising content.” (See
Bolz Decl. Exh. C (dkt. #6-3) 2.) That study indicated that Unity Health was fourth in
terms of name recognition for managed healthcare insurance providers.
The study also
showed that the primary drivers of new state and commercial members to Unity Health’s
network are its pricing, its affiliation with UW Health and the physicians and hospitals in
its preferred network.
III. Iowa Health Systems’ Adoption of the “UnityPoint” Name and its Entry into
Wisconsin
On March 5, 2013, Iowa Health Systems carried out a “Fictitious Name Resolution,”
adopting the name “UnityPoint Health.” (See Bianchi Decl. Exh. B (dkt. #13-2).) In April
2013, Iowa Health Systems first began doing business as “UnityPoint Health,” which was
chosen as most consistent with branding itself as one system, operating in multiple regions,
and allowing for growth while marketing itself as patient-focused, in part through adoption
of the tag line, “The point of unity is you.”
In October 2013, UnityPoint and Meriter entered into an Affiliation Agreement.
Pursuant to that Agreement, UnityPoint would become Meriter’s sole corporate member
and would acquire control of Meriter’s subsidiary, Physicians Plus Insurance Corporation
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(“PPIC”), one of two prominent physician-centered HMOs in the region (the other being
Dean Care, which is now affiliated with St. Mary’s Hospital). Meriter provides healthcare
services to Dane County and the surrounding communities and competes with UW Health
and St. Mary’s health care patients. Likewise, PPIC competes with Unity Health and Dean
Care for institutional and individual purchasers of health care insurance.
Following the announcement of their agreement, Meriter sent a letter to its
customers informing them of its affiliation with UnityPoint.
The letter also assured
consumers that the new affiliation would not alter the services offered by Meriter or PPIC.
The parties completed UnityPoint’s acquisition of Meriter, effective January 1, 2014.
Other than the October 2013 press release and a press conference held in January
2014, UnityPoint has done nothing to date to advertise the link between Meriter and
UnityPoint. (Hr’g Tr. (dkt. #92) 39:13-15; 61:24-62:5.) Additionally, UnityPoint has no
specific plans to advertise the new affiliation as part of a rebranding process. (Id. at 39:2-6.)
Still, the logos it plans to use for Meriter are:
This limited rebranding is inconsistent with UnityPoint’s other hospitals, which features the
UnityPoint mark most prominently, with the location of the hospital or clinic below. Both
UnityPoint’s witnesses and its counsel also testified at the preliminary injunction hearing
that it does not intend to change the PPIC name or mark. (See, e.g., Hr’g Tr. (dkt. #90)
142:10-12; Hr’g Tr. (dkt. #92) 23:12-14.) As a result, PPIC will continue to be branded as:
6
IV. OCI Proceedings
As part of its planned acquisition of Meriter, UnityPoint applied to the Wisconsin
Commissioner of Insurance for approval of its plan for acquisition of control of Meriter’s
insurance arm, PPIC. On December 6, 2013, Unity Health filed a Motion to Intervene and
an Opposition in the Matter of the Acquisition of Control of Physicians Plus Insurance
Corporation by Iowa Health Systems d/b/a UnityPoint Health. Although UnityPoint did
not intend to change the PPIC name, Unity Health objected to the affiliation, arguing that
there would likely be joint marketing of PPIC and UnityPoint in Wisconsin.
OCI found that UnityPoint and PPIC “[did] not plan to change the name of PPIC or
to require PPIC to use the UnityPoint Health trade name.” Accordingly, it denied Unity
Health’s motion to intervene on December 18, 2013. Finding that any alleged confusion
was purely speculative, OCI ultimately granted UnityPoint’s application subject to three
conditions:
a) If PPIC uses the UnityPoint or UnityPoint Health
tradename(s) and trademark(s) to reference its affiliation with
UnityPoint Health in its marketing materials, PPIC will include
a reasonable notice that PPIC is an affiliate of Iowa Health
System, which does business as UnityPoint Health.
b) If PPIC uses the UnityPoint or UnityPoint Health
tradename(s) and trademark(s) to reference its providers in its
marketing materials, PPIC will include a reasonable notice that
(1) the provider is an affiliate of Iowa Health System, which
does business as UnityPoint Health, or (2) UnityPoint Health is
not an affiliate of Unity Health Plans Insurance corporation.
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c) Nothing in these conditions subsequent will preclude OCI
from ordering further remedies to cure any potential customer
confusion.
(See Def.’s Opp. to Expedited Hr’g Exh. B (dkt. #20-2) 3-4.) Unity Health has appealed
that decision.
V. Evidence of Confusion
The parties dispute whether any actual confusion has thus far arisen from the
announced merger of Meriter and UnityPoint. With its initial motion for a preliminary
injunction, Unity Health submitted as evidence six telephone call recordings between Unity
Health members and customer service representatives. Unity Health argues that these calls
demonstrate actual consumer confusion even though the Meriter-UnityPoint affiliation is
still very new and has not yet been actively marketed.
In some of those calls, Unity Health members inquire as to whether Meriter’s merger
will affect their Unity Health coverage of certain Meriter services. (See, e.g., Wiegert Supp.
Decl. Exh. B (dkt. #36-2) (“I know that Meriter sent us a letter recently about merging
with, I apologize, I don’t recall who at this moment, but I just wanted to know is that going
to affect, you know, our coverage at Meriter at all. . . ?”); id. at Exh. D (dkt. #36-4)
(“There’s been several articles in the paper about Meriter Hospital and UnityPoint. Does
that affect – Meriter is where I would normally, if I had to go to the hospital, that’s where I
would go. Does that affect that?”).)
In other calls, Unity Health members inquire as to whether Unity Health and
Meriter are discussing the possibility of a merger, suggesting that those members are at least
somewhat confused. (See, e.g., Wiegert 2d Supp. Decl. Exh. E (dkt. #38-1) (“Question for
8
you. I heard in a press release that that, uh, Meriter and Unity are talking. Is that true?”);
id. at Exh. F (dkt. #38-2) (“The other thing, I had seen advertised recently, there was some
merger between, uh, Physician’s Plus and Unity, I’m not sure if it was Unity Health
Insurance or not.”).)
The remaining two calls come from Unity Health members who have acted on their
own confusion:
one of whom apparently read the press release and purchased health
insurance through Unity Health because she believed Unity Health would be covering
Meriter services (see Wiegert Supp. Decl. Exh. A (dkt. #36-1)); the other of whom went to a
UnityPoint urgent care clinic in Iowa because she assumed it would be covered by her Unity
Health insurance (see id. at Exh. C (dkt. #36-3) (“I’ve never heard of such a thing! Why
would they use the name Unity if they’re not part of Unity Insurance?”).
During the hearing, Unity Health offered additional evidence of confusion acquired
through discovery of internal documents to UnityPoint, which suggest that Meriter and
UnityPoint themselves have recognized the potential for at least some confusion. (See Pl.’s
Exh. 063, at UPH00005042 (Meriter meeting minutes stating council members have heard
questions including “will ‘Unity’ take my insurance now?” and “Is ‘Unity’ taking Meriter
over?”); Pl.’s Exh. 279, at UPH00004449 (UnityPoint question-and-answer document
stating “Yes there will most likely be some confusion between UnityPoint (Iowa) and Unity
Health Insurance.”); Pl.’s Exh. 280, at UPH00004995 (UnityPoint question-and-answer
document stating “Jim noted a trademark search is in process and there may be some
confusion at first but is not too concerned”).)
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Finally, Meriter itself has apparently received between 10 and 15 inquiries or
questions that mentioned “Unity.” (See Pl.’s Exh. 250 at 11.) The details of those calls are
not known, however, because Meriter did not record them.
OPINION
To obtain preliminary injunctive relief, a plaintiff must demonstrate as a threshold
matter: (1) some likelihood of success on the merits of its trademark infringement claim;
and (2) the lack of an adequate remedy at law, coupled with irreparable harm if the
injunction is denied. Wolf Appliance, Inc. v. Viking Range Corp., 686 F. Supp. 2d 878, 886
(W.D. Wis. 2010). If the plaintiff meets these first two requirements, it must then show:
(3) the harm it would suffer if denied an injunction would outweigh the harm the defendant
would suffer if the injunction issues; and (4) the issuance of an injunction would not
negatively affect the public interest (i.e., non-parties). Id. As both sides acknowledge, the
Seventh Circuit has often stated that this analysis involves a sliding scale, so that “the more
likely the plaintiff will succeed on the merits, the less the balance of irreparable harms need
favor the plaintiff’s position.” Ty, Inc. v. Jones Grp., Inc., 237 F.3d 891, 895 (7th Cir. 2001).
This approach “is not mathematical in nature[;] rather[,] ‘it is more properly characterized
as subjective and intuitive, one which permits district courts to weight the competing
considerations and mold appropriate relief.’” Id. (quoting Abbott Labs. v. Mead Johnson &
Co., 971 F.2d 6, 12 (7th Cir. 1992)).
I. Likelihood of Success on the Merits
To meet the first hurdle for entry of a preliminary injunction, Unity Health must at
least show that it has “a ‘better than negligible’ chance of succeeding on the merits.” Ty,
10
Inc., 237 F.3d at 897; see also Platinum Home Mortgage Corp. v. Platinum Financial Grp., Inc.,
149 F.3d 722, 726 (7th Cir. 1998). “This is an admittedly low requirement and is simply a
threshold question.” Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S.A., 549 F.3d
1079, 1096 (7th Cir. 2008). Only after this hurdle is cleared need the court determine how
likely Unity Health’s success must be to issue an injunction. Id.
Accordingly, the court looks first at Unity Health’s substantive trademark
infringement claim under § 43(a) of the Lanham Act. To prevail in an action under § 43(a),
Unity Health must establish that: (a) it has a protectable trademark; and (b) there is a
likelihood of confusion as to the origin or affiliation of UnityPoint’s services. Int’l Kennel
Club of Chi., Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1084 (7th Cir. 1988). UnityPoint
contests both of these elements, arguing that: (a) Unity Health has not demonstrated that it
has protectable trademark rights in the UNITY mark; and (b) Unity Health has failed to
establish a likelihood of confusion. The court considers each of these requirements in turn,
keeping in mind that at this stage of the analysis, it must consider “not whether the plaintiff
will or will not prevail on the merits, but whether the plaintiff has demonstrated a better
than negligible chance of establishing the ‘trademark’ and ‘likelihood of confusion’ prongs
under section 43(a).” Id. However minimally, the court finds Unity Health has met this
threshold question for the reasons set forth below.
A. Protectable Trademark
Although Unity Health has not registered its mark, the Lanham Act “protects
unregistered (common law) trademarks as well as federally registered trademarks.” Blau
Plumbing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 608 (7th Cir. 1986). “The validity of a
11
mark pertains to whether a ‘word, term, name, symbol or device,’ 15 U.S.C. § 1125(a)(1), is
entitled to protection under trademark law by focusing on whether that mark specifically
identifies and distinguishes one company’s goods or services from those of its competitors.”
Platinum Home Mortgage Corp., 149 F.3d at 726. When the mark at issue is not registered
with the United States Patent and Trademark Office, “the burden is on the claimant” to
establish that it is entitled to protection. Id. at 727 (citing Mil-Mar Shoe Co., Inc. v. Shonac
Corp., 75 F.3d 1153, 1156 (7th Cir. 1996)).
Marks are classified into five categories of increasing distinctiveness: (1) generic; (2)
descriptive; (3) suggestive; (4) arbitrary; and (5) fanciful. Id. (citing Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 767-68 (1992)). Generic marks are commonly used, do not
identify a particular source and are entitled to no trademark protection. Id. Descriptive
marks are those that describe “the ingredients, qualities, or characteristics of an article of
trade or a service.” Id. (quoting Liquid Controls Corp. v. Liquid Control Corp., 802 F.2d 934,
936 (7th Cir. 1986)). They do not generally receive trademark protection, but may if they
acquire secondary meaning “in the collective consciousness of the relevant community.” Id.
(quoting Mil-Mar Shoe Co., 75 F.3d at 1157).
Finally, suggestive, arbitrary or fanciful
marks, “because their intrinsic nature serves to identify a particular source of a product, are
deemed inherently distinctive and are entitled to protection.” Two Pesos, 505 U.S. at 768.
Unity Health argues that its mark is arbitrary, but this is a bridge too far.
An
arbitrary mark is one “applied to a service unrelated to its meaning.” Sullivan v. CBS Corp.,
385 F.3d 772, 776 (7th Cir. 2004). While the word “unity” by itself has no immediate
relationship to health care, “it is not necessary that a descriptive term depict the [product]
itself, but only that the term refer to a characteristic of the [product].” Sands, Taylor & Wood
12
Co. v. Quaker Oats Co., 978 F.2d 947, 952 (7th Cir. 1992) (quoting Forum Corp. v. Forum,
Ltd., 903 F.2d 434, 438 (7th Cir. 1990)). Here, the word “unity” unquestionably describes
the characteristics of the service Unity Health offers. Indeed, the branding history of both
parties indicate that the word “unity” was chosen to convey characteristics of “unified” health
services available across hospital and physician groups. Unity Health itself emphasizes that
its insurance business is an “integrated managed health care business” and that its insurance
services are integrated with its delivery of health services, “unifying” all aspects of health
care through the services it offers.
(See PPFOF (dkt. #12) ¶¶ 9-11.)
Based on Unity
Health’s own characterization of the services it offers, the claimed mark “UNITY” is plainly
not arbitrary; it is either descriptive or suggestive.
The line between descriptive and suggestive marks is admittedly a thin one. The
Seventh Circuit has articulated a test known as the “degree of imagination test” to identify
the difference:
[I]f a mark imparts information directly it is descriptive. If it
stands for an idea which requires some operation of the
imagination to connect it with the goods, it is suggestive.
Sands, Taylor & Wood Co., 978 F.2d at 952. In applying this test, the Seventh Circuit has
upheld a district court’s finding that the trade name “Platinum Mortgage” was merely
descriptive, because it “describe[d] the quality of plaintiff’s mortgage services.” Platinum
Home Mortgage Corp., 149 F.3d at 728.
Here, the question is even closer. Nevertheless, the court agrees with UnityPoint
that the trade name “UNITY” is likely to be found merely descriptive. As in Platinum Home
Mortgage, “‘the mental leap . . . is nearly instantaneous’ and . . . requires little imagination.”
Id. (quoting Platinum Home Mortgage Corp. v. Platinum Fin. Grp., Inc., No 97 C 5293, 1997
13
WL 567909, at *3-4 (N.D. Ill. Sept. 4, 1997)).
Unity Health’s own explicit focus on
integrating and “bringing together” all aspects of health services strengthens the conclusion
that its chosen mark is descriptive of the characteristics of its services. (See, e.g., Christian
Decl. Exh. 44 (dkt. #64-13) 5 (choosing name “Unity” because it meant, among other
things, “[a]ll inclusive,” “comprehensive,” “[u]nified approach,” and “connected employers,
employees, physicians and hospitals”).)
Defendants also point to various other parties in the health care industry who use the
same or similar marks, including “UnitedHealthCare,” “Unity Hospice,” Unity Clinic” and
“Unity Family Health and Services.” This also supports a finding that the “Unity” mark is
merely descriptive (and therefore not inherently distinctive), since the mark itself “does not
identify one particular source or designate the specific origin of [the] services without proof of
secondary meaning.” Id. (emphasis added).
Because descriptive marks are not inherently distinctive, Unity Health must show
that its mark has acquired secondary meaning. “Secondary meaning arises when a mark
‘has been used so long and so exclusively by one company in association with its goods or
services that the word or phrase has come to mean that those goods or services are the
company’s trademark.’” Wolf Appliance, Inc., 686 F. Supp. 2d at 887 (quoting Packman, 267
F.3d at 641). In determining whether a mark has acquired secondary meaning, the Seventh
Circuit considers seven factors: (a) direct consumer testimony; (b) consumer surveys; (c)
exclusivity, length and manner of use; (d) amount and manner of advertising; (e) amount of
sales and number of customers; (f) established place in the market; and (g) proof of
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intentional copying. Echo Travel, Inc. v. Travel Assocs., Inc., 870 F.2d 1264, 1267 (7th Cir.
1989).3
Defendants principally argue that Unity Health has not acquired rights in the term
“UNITY” standing alone, because its logo has always included additional words -- such as
“Health Plans,” “Health Insurance” and, most recently, “Affiliated with UW Health.” As
plaintiff points out, however, the Seventh Circuit “adheres to the rule that ‘if one word or
feature of a composite trademark is the salient portion of the mark, it may be given greater
weight than the surrounding elements.’” Ty, Inc., 237 F.3d at 898 (quoting Henri’s Food
Prods. Co., Inc. v. Kraft, Inc., 717 F.2d 352, 356 (7th Cir. 1983)). In other words, when a
portion of a mark is particularly “well-known and famous,” it is appropriate to give that
portion more weight in the analysis. Id. at 899. At the hearing, Unity Health presented
evidence demonstrating that its advertising has frequently employed the word “Unity”
standing alone. (See, e.g., Pl.’s Exh. 141 (1999 “Unity News” newsletter); Pl.’s Exh. 181
(2012-13 print ad; “Think healthy. Think Unity.”); Pl.’s Exh. 182 (“Sickness happens. Get
Unity.”).) Moreover, Unity Health’s logos have always placed the greatest emphasis on the
word “Unity,” and even more specifically on the letter “U,” a happy marriage of logos after
being acquired by UW Health.
3
Without citation, Unity Health asserted during the hearing that secondary meaning is
presumed upon five years of use. The court has found no support for that proposition. 15
U.S.C. § 1052(f) allows an applicant to use “proof of substantially exclusive and continuous use
thereof as a mark by the applicant in commerce for the five years before the date on which the
claim of distinctiveness is made” as prima facie evidence of distinctiveness, but it appears that
that section is applicable only in attempting to place a trademark on the principal register.
15
Accordingly, even if Unity Health’s mark is in fact “Unity Health” or “Unity Health
Insurance,” the “Unity” portion is salient and has reduced the importance of the other
elements, at least within Unity Health’s primary marketplace of southwest Wisconsin.4
Other factors also support a finding that Unity Health has a protectable mark. Unity
Health has used the “UNITY” portion of its mark continuously since 1995. Unity Health
also has increased its market share in the Group Accident and Health Market in Wisconsin
from 2.9% in 2002 to 4.8% in 2012 -- admittedly still relatively small, but supporting Unity
Health’s claim of having an established place in the southwestern Wisconsin market.
Similarly, Unity Health’s membership has increased from about 91,000 in 2009 to about
150,000 as of November 2013. Unity Health also avers to spending over $3,000,000 in the
last five years advertising “under the UNITY trademark,” which gives some weight to Unity
Health’s argument that it has acquired secondary meaning in that mark.
Thus, Unity
Health has established a better-than-negligible chance that it will be able to prove
protectable common law trademark rights in the “UNITY” mark within southwestern
Wisconsin, which leads the court to proceed to the next step of the analysis.
Whether “Unity” is the salient portion of the mark is certainly open to debate even within
this market, something that will likely require a well-conceived and executed market study
to begin to resolve, but Unity Health has at least offered enough proof to find more than a
negligible chance of prevailing on this argument.
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4
B. Likelihood of Confusion
The second element of the infringement claim requires Unity Health to demonstrate
that it has a better-than-negligible chance of demonstrating likelihood of confusion. The
test for likelihood of confusion requires the court to consider seven factors: “(1) similarity
between the marks in appearance and suggestion; (2) similarity of the products; (3) area and
manner of concurrent use; (4) degree of care likely to be exercised by consumers; (5)
strength of complainant’s mark; (6) actual confusion; and, (7) intent of defendant to palm
off his product as that of another.” Barbecue Marx, Inc. v. 551 Ogden, Inc., 235 F.3d 1041,
1043-44 (7th Cir. 2000) (internal quotation marks omitted). No single factor is dispositive,
and the court may assign varying weights to each factor based on the particular case. Id. at
1044. Three of the factors are particularly important, however: the similarity of the marks,
the defendant’s intent, and actual confusion. Id. (citing Eli Lilly & Co. v. Natural Answers,
Inc., 233 F.3d 456, 461 (7th Cir. 2000)). Here again, Unity Health has offered sufficient
evidence to establish some chance of prevailing within its narrow marketplace of
southwestern Wisconsin.5
i.
Similarity of the Marks
To determine whether marks are similar, they must be “compared in light of what
occurs in the marketplace.” James Burrough Ltd. v. Sign of the Beefeater, Inc., 540 F.2d 266,
275 (7th Cir. 1976). To further this analysis, a court may examine marks for “similarity of
Neither side disputes that southwestern Wisconsin constitutes a distinct market for health
care services. For reasons alluded to in the fact section above, the tendency of consumers to
shop locally for health services, if not health insurance, and obvious barriers to entry (at
least in the short term), the existence of such a distinct market also seems reasonable
enough. In any event, the court will assume such a market for purposes of deciding Unity
Health’s motion for preliminary injunction.
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5
‘sound, sight and meaning.’” Henri’s Food Prods., 727 F.2d at 355 (quoting Plough, Inc. v.
Kreis Labs., 314 F.2d 635, 638 (9th Cir. 1963)).
“Different packaging, coloring, and
labeling can be significant factors in determining whether there is a likelihood of confusion.”
Packman, 267 F.3d at 644 (7th Cir. 2001). As noted above, if one word or feature of a
composite trademark is the salient portion of the mark, it may be given more weight than
the surrounding elements. Int’l Kennel Club, 846 F.2d at 1087-88 (quoting Henri’s Food
Prods., 717 F.2d at 356). Nevertheless, an inquiry into similarity will look at the entirety of
the marks, not just one specific component. AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th
Cir. 2008).
In many respects, the marks appear to be dissimilar. Certainly from a consumer’s
perspective, Unity Health’s logo features the word “Unity” in “Badger red” as its focal point,
with a large “U” styled to evoke the University of Wisconsin:
In contrast, UnityPoint represents that the marks it will actually use in southwestern
Wisconsin feature the well-known blue “Meriter” mark as their focal point, with a blue
Greek cross and “UnityPoint Health” (or some variant thereof) below:
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The “UnityPoint” portion of the mark contains letters of the same size, is colored black and
is in a different font than the “Unity” of Unity Health’s mark. The only real similarity
between these two logos, then, is that both include the word “unity.”
Moreover, the PPIC logo, which UnityPoint represents it will not change, bears no
similarity to the Unity Health logo: it features the words “Physicians Plus” in blue along
with a mark that combines a cross with the letter “P”:
Certainly, this is of significance, particularly because PPIC, not UnityPoint, is Unity
Health’s direct competitor, and UnityPoint has represented that it will not advertise the
affiliation between PPIC and UnityPoint. This is not just a representation by UnityPoint,
as with its planned use of the Meriter dominant mark with UnityPoint, but in part a
binding order of the OIC unless overturned on appeal.6
Although these logos are dissimilar, Unity Health rightly points out that the court’s
analysis does not end there. The court must consider the marks themselves with attention
to how they will be encountered in the marketplace. While the parties both advertise in
print publications, consumers also encounter the marks through television and radio
advertising, when the visual dissimilarities between their logos will be of little or no
consequence. See Meridian Mut. Ins. Co. v. Meridian Ins. Grp., Inc., 128 F.3d 1111, 1115-16
(7th Cir. 1997) (in reaching a finding of no similarity, the district court erred by only
comparing logos without considering the fact that the mark was likely to be encountered
The OIC order allows some reference of PPIC’s affiliation with UnityPoint, but only with
reference to Iowa Health or express disavowal of any affiliation with Unity Health.
19
6
aurally).
Additionally, UnityPoint’s Director of Communications and Public Relations,
Laura Sinnard, conceded that UnityPoint’s advertising regularly uses the tagline “The point
of unity is you.” (Hr’g Tr. (dkt. #92) 59:11-16.) This rearrangement of the elements of its
“UnityPoint” mark has the potential to prove extremely confusing, particularly in light of
Unity Health’s print and radio advertising urging consumers to “choose Unity,” “think
Unity” or “get Unity.”
Thus, while the parties’ logos are not visually similar, the likelihood of confusion over
the marks is a much closer question. Accordingly, the court concludes that as consumers will
encounter them in the marketplace, the similarities between “Unity” and “UnityPoint”
create some potential for confusion that is not entirely mitigated by the difference in logos,
at least as UnityPoint first enters the southwestern Wisconsin market for health care
services.
ii.
Similarity of the Products
Trademark law “prohibits use of a senior user’s mark not only on products that are in
direct competition with those of the senior user but also on products that are considered to
be ‘closely related’ to the senior user’s.” Sands, Taylor & Wood Co., 978 F.2d at 958. “A
‘closely related’ product is one ‘which would reasonably be thought by the buying public to
come from the same source, or thought to be affiliated with, connected with, or sponsored
by, the trademark owner.”
Id. (quoting 2 J. Thomas McCarthy, Trademarks and Unfair
Competition § 24:3, at 166).
UnityPoint admits in its briefing that the medical services it offers fall under the
same “umbrella of healthcare services” as Unity Health’s insurance services and its affiliated
20
health care providers.
The court agrees.
Particularly in this market, health insurers
frequently affiliate with particular care providers (as Unity Health has with UW Hospital,
Dean Care has with St. Mary’s and PPIC has with Meriter). Moreover, there is at least
some evidence that a portion of the buying public could reasonably believe that “UnityPoint
Health” services are linked to “Unity Health Insurance,” or that a “UnityPoint Clinic” is
linked to “Unity Health Insurance” as its affiliated insurer. Cf. Int’l Kennel Club, 846 F.2d at
1088 (“[E]ven if fanciers of purebred dogs or stuffed toys attached any meaning to the
defendants’ [“24K Polar Puff”] house mark, they would necessarily believe that the
International Kennel Club had licensed, approved or otherwise authorized the defendants’
use of the International Kennel Club name.”). Thus, UnityPoint’s assertion that this factor
either favor[s] UnityPoint Health or [is] effectively neutral to the analysis” rings hollow.
(Def.’s Br. (dkt. #43) 41.)
UnityPoint’s only argument to the contrary is that Unity Health’s mark is so weak
that the public will easily distinguish differences between the marks even though the goods
are closely related. At most, this argument affects the amount of weight this court gives to
this factor in light of the strength of the mark (discussed below); it does not change the fact
that the products offered by the two companies are similar. Accordingly, this factor weighs
in favor of Unity Health.
iii.
Area and Manner of Concurrent Use
As it must, UnityPoint admits in its briefing that the parties will be offering services
in the same geographic area; indeed, UnityPoint deliberately acquired the locally-prominent
Meriter hospital and clinics, as well as its wholly-owned Physicians Plus HMO, in order to
21
expand into the market for health care services in southwestern Wisconsin. The court,
therefore, flatly disagrees with UnityPoint that this factor “either favor[s] UnityPoint
Health or [is] effectively neutral to the analysis.”
(Def.’s Br. (dkt. #43) 41.)
While
certainly this factor alone is not dispositive, it weighs heavily in favor of Unity Health.
iv.
Consumers’ Degree of Care
Next, the court considers the degree of care consumers will exercise in purchasing the
products or services at issue. “[T]he lower the degree of ordinary care, the greater likelihood
of confusion, and vice versa.” Richard L. Kirkpatrick, Likelihood of Confusion in Trademark
Law, § 6:2, at 6-4. In considering this factor, the court “must stand in the shoes of the
ordinary purchaser, buying under the normally prevalent conditions of the market and
giving the attention such purchasers usually give in buying that class of goods.” Luigino’s,
Inc. v. Stouffer Corp., 170 F.3d 827, 831 (8th Cir. 1999) (internal quotation marks omitted).
“The more widely accessible and inexpensive the products and services, the more likely that
consumers will exercise a lesser degree of care and discrimination in their purchases.” CAE,
Inc., 267 F.3d at 683. In contrast, consumers are generally held to exercise greater care
when making more expensive purchases. Maxim’s Ltd. v. Badonsky, 772 F.2d 388, 393 (7th
Cir. 1985); see, e.g., Wolf Appliance, Inc., 686 F. Supp. 2d at 891 (noting that high-end ranges
“are relatively expensive” and that “[a] consumer who is investing $2,000-$12,000 on a
range is unlikely to buy a range without being sure of the brand”).
Price is not the only factor relevant to determine consumers’ degree of care, or even
necessarily determinative on its own. See Nike, Inc. v. Just Did It Enters., 6 F.3d 1225, 1230
(7th Cir. 1993) (“Neither Nike nor the district court has cited any case where a customer’s
22
degree of care depends solely on price.”). Certain consumer decisions may carry with them
a greater standard of care based on the nature of the purchase. See Kirkpatrick, Likelihood of
Confusion in Trademark Law, § 6:5, at 6-12 – 6-14 (listing circumstances courts have held to
increase the degree of care such as “consultation with experts,” “institutional purchasing
practices,” and “solicitation and comparison of proposals”); see also Wash. Nat’l Ins. Co. v.
Blue Cross & Blue Shield United of Wis., 727 F. Supp. 472, 475 (N.D. Ill. 1990)).
Taken as a whole, this factor weighs heavily in UnityPoint’s favor.
First, the
evidence, as well as common sense, dictates a finding that consumers approach health care
decisions with a high degree of care, including anecdotal evidence offered by Unity Health
itself in the form of customers initiating calls to find out how their health insurance
coverage might be affected by the proposed merger between Meriter and UnityPoint. (See
Wiegert Supp. Decl. Exhs. B, D (dkt. ##36-2, 36-4).) Health insurance is also a costly
service, and given the rising costs of health care services, it is likely among the most costly
purchases to an average consumer. Even if this were not so, choosing a health insurer is a
decision of significant gravity, particularly as it can affect virtually all of a consumer’s health
care options going forward. This, too, is a growing concern to consumers as health services
and health insurance decisions increasingly overlap, particularly in an area like southwestern
Wisconsin, where HMOs play a significant part, if not the dominant part, in the market for
health insurance.
Certainly, Unity Health is right to point out that the intertwined nature of health
insurance and providers in the market for medical services in southern Wisconsin has made
it more difficult to navigate the system. As confirmed by anecdotal evidence, this may
prove more of a short-term issue than a long-term issue, as consumers sort out their choices
23
and particularly as larger, sophisticated state and commercial entities come up for annual
renewal of the health care options they wish to offer their employees. And contrary to
Unity Health’s assertion, the complications of the Affordable Care Act are more likely to
heighten even individual consumers’ degree of care, as they are required to navigate an
unfamiliar system to make an expensive purchase that may impact their family’s health.
Unity Health argues that even if consumers exercise a high degree of care, that does
not foreclose the possibility of “initial interest confusion.” Initial interest confusion “occurs
when a customer is lured to a product by the similarity of the mark, even if the customer
realizes the true source of the goods before the sale is consummated.” Promatek, 300 F.3d at
812. For purposes of initial interest confusion, “[w]hat is important is not the duration of
the confusion, it is the misappropriation of . . . goodwill.” Id. at 812-13.
For example, this court considered the possibility of initial interest confusion in Wolf
Appliances.
In that case, the plaintiff, Wolf Appliance, had trademarked the use of red
knobs on ranges and sued Viking Range Corporation for offering ranges with similar red
knobs. Though the court found that consumers were likely to use a high level of care in
making such an expensive purchase, there were “scenarios in which confusion [was] likely”:
Suppose a potential range customer is at a dinner party and the
hostess tells the potential customer how much the hostess enjoys
her range. The range happens to be a Wolf range with red
knobs. Several weeks or months later, when the potential
customer enters a retail store to browse ranges, he or she sees a
stainless steel Viking range displayed with red knobs that looks
similar to the red-knob range he or she has seen in the past.
There are no other ranges displayed with red knobs. The
customer does not remember the brand of the hostess’ range,
but the customer knows that Viking is a well-known
manufacturer in the high-end range market. The red knobs look
familiar, so the customer thinks this is the range to which the
hostess spoke so highly. . . . Such a situation could qualify as
24
“initial interest” confusion, because defendant would be reaping
the benefit of the goodwill that plaintiff has developed in its
mark.
Wolf Appliance, Inc., 686 F. Supp. 2d at 891-92; see also Promatek, 300 F.3d at 812-13
(placing “Copitrack” metatag in Equitrac website would direct consumers to competitor
website, where they would likely “learn more about Equitrac and its products before
beginning a new search for Promatek and Copitrak”).
The court is not persuaded that this case presents a comparable situation to Wolf. If
a person mentions to a potential health insurance consumer that she has had a good
experience with her HMO insurer, “Unity,” when the potential consumer enters the market,
that consumer will be faced with a choice between Unity Health Insurance and Physicians
Plus, not a choice between Unity Health and UnityPoint. Though the products are similar
enough that a person may believe Unity Health and UnityPoint clinics are linked in some
way, the two are not direct competitors. Moreover, it seems even more unlikely, as Unity
Health argued during the preliminary injunction hearing, that on the basis of Unity
Health’s goodwill alone, a customer will enter into an insurance plan through PPIC because
he knows that PPIC is affiliated with Meriter, which is in turn affiliated with “UnityPoint.”
(See, e.g., Hr’g Tr. (dkt. #90) 36:17-38:4.)
Unity Health also argues that Unity Health customers will be drawn to Meriter
because of the use of “UnityPoint” in its new mark, on the assumption that Unity Health
will cover Meriter services. Indeed, an anecdote offered by Unity Health supports that
possibility (though misinformation from a third party also appeared to play a role in the
confusion). (See Wiegert Supp. Decl. Exh. C (dkt. #36-3).) Still, the court is not convinced
that this should carry great weight in light of the amount of care that consumers generally
25
exercise in making health care decisions and given that at least some consumers choose their
health care providers first, and then select an insurer who covers those providers. (See, e.g.,
id. at Exh. A (dkt. #36-1) (Unity Health customer signed up for Unity Health insurance
services because she wanted to use Meriter and believed Meriter would be covered).)7
Accordingly, the court concludes that the consumer care factor weighs in UnityPoint’s favor.
v.
Strength of the Mark
“The ‘strength’ of a trademark refers to the mark’s distinctiveness, meaning its
propensity to identify the products or services sold as emanating from a particular source.”
CAE, Inc., 267 F.3d at 684. Marks that are widely recognized merit greater protection from
the courts. See, e.g., Nike, Inc., 6 F.3d at 1231. In assessing mark strength, the court must
first determine to which category the mark belongs.
McGraw-Edison Co. v. Walt Disney
Prods., 787 F.2d 1163, 1170 (7th Cir. 1986). As noted above, the court has found that
“UNITY” in this context is likely a descriptive mark, which is on the weak end of the
trademark scale: such marks are not inherently distinctive and require a showing of
secondary meaning. Additionally, the fact that numerous other entities in the health care
industry use the word “Unity” in their name or a closely-related variant like “United” or
“Unified,” supports the notion that “Unity,” on the whole, is a relatively weak indicator of
This is not to reject the real possibility, particularly in the near term, that new Meriter
advertising and signage touting its affiliation with UnityPoint may not engender confusion
and even expectations of insurance coverage by Unity Health for services offered by Meriter.
But both sides have a strong incentive to avoid the loss of goodwill that might be engendered
if these expectations are not addressed. Moreover, as anyone knows who attempts to obtain
health care at a hospital or clinic, insurance coverage is among the first items addressed
except in true emergencies. Still, if the failure to fulfill the reasonable expectations of its
insureds proves to be a problem for Unity Health consumers, the court would not be
adverse to a motion seeking to amend its preliminary injunction to require Meriter to
discontinue all use of Unity and/or to provide services free of charge.
26
7
the source of services. See CAE, Inc., 267 F.3d 685 (noting that evidence of third-party use
can weaken a party’s mark); see also, e.g., UNITEDHEALTHCARE, Registration No.
1967622.
Nevertheless, as previously discussed, there is at least some evidence that Unity
Health has developed secondary meaning in the relatively limited area of southwestern
Wisconsin. Moreover, testimony at the hearing indicated that there are no competing uses
of the “UNITY” mark in the Unity Health Territory, except at its borders. (Hr’g Tr. (dkt.
#90) 23:13-24.)
As noted, Unity Health has also seen its market share and customer
membership numbers rise significantly in recent years, no doubt in part due to advertising
that links its services both to the “Unity Health Insurance” mark and to “UNITY” alone.
At least in southwestern Wisconsin, the “UNITY” mark is, if not strong, not so weak as to
completely discount it. Overall, this factor is effectively neutral to the analysis.
vi.
Actual Confusion
“There can be no more positive or substantial proof of the likelihood of confusion
than proof of actual confusion.” Int’l Kennel Club, 846 F.2d at 1089 (quoting World Carpets,
Inc. v. Dick Littrells New World Carpets, 438 F.2d 482, 489 (5th Cir. 1971)). If available, this
evidence is “entitled to substantial weight” in the overall analysis. CAE, Inc. v. Clean Air
Engineering, Inc., 267 F.3d 660, 685 (7th Cir. 2001). Nevertheless, “the plaintiff need not
show actual confusion in order to establish likelihood of confusion.” Sands, Taylor & Wood
Co., 978 F.2d at 960 (emphasis in original). Nor does a plaintiff need to produce consumer
survey evidence at the preliminary injunction stage. Int’l Kennel Club, 846 F.2d at 1086.
27
“One instance of actual confusion has been deemed sufficient to weigh in favor of
finding a likelihood of confusion.” CAE, Inc., 267 F.3d at 686. The Seventh Circuit has
upheld a finding of consumer confusion based on “letters, phone calls, and inquiries
received by the plaintiff.” Int’l Kennel Club, 846 F.2d at 1090. On the other hand, instances
of confusion that are not attributable to the applicable consumer group are entitled to less
weight. See, e.g., Packman v. Chi. Tribune Co., 267 F.3d 628, 645 (7th Cir. 2001) (friends
and family who did not intend to purchase goods were not relevant consumers under the
Lanham Act); CAE, Inc., 267 F.3d at 686 (testimony absent identity of speaker and
timeframe not entitled to much weight, “particularly because the speaker was not a
customer of CAE, Inc. but rather a supplier”). De minimis evidence of confusion may also
be discounted.
See, e.g., Packman, 267 F.3d at 645 (holding that district court properly
discounted four calls as de minimis); Smith Fiberglass Prods., Inc. v. Ameron, Inc., 7 F.3d 1327,
1330-31 (7th Cir. 1993) (“vague hearsay account of what may have been actual confusion”
was properly discounted).
Unity Health relies primarily on its own recordings of six recent customer phone calls
to demonstrate actual confusion. At least two of these calls, the court discounts entirely:
Exhibits B and D feature not callers who have conflated Unity Health with UnityPoint, but
instead who have heard that Meriter is merging with an outside company and want to know
if that will affect their Unity Health insurance coverage of Meriter services. (See Wiegert
Decl. Exhs. B, D (dkt. ## 36-2, 36-4).) The other four calls are somewhat more persuasive.
Those calls came from members of the relevant consumer group and indicate some
confusion as to whether Unity Health and UnityPoint are the same entity (in the case of
calls A, E and F) or whether Unity Health and UnityPoint are affiliated in some way (in the
28
case of call C). UnityPoint urges the court to dismiss these calls as de minimis, but the
court is not inclined to do so at the preliminary injunction stage -- particularly where these
examples of confusion occurred even before UnityPoint has actively marketed the MeriterUnityPoint affiliation.
Even if this anecdotal evidence from Unity Health were insufficient, Meriter itself
has apparently taken between 10 and 15 calls from its own customers that mention
“Unity.” While this evidence is less significant, particularly since the details of those calls
are unknown, it nevertheless reinforces the notion that some confusion has already occurred
at this very early stage, and that more confusion is likely to result -- at least in the short
term -- once active marketing of the new affiliation begins.8
vii.
UnityPoint’s Intent
“A finding of fraudulent intent or bad faith is not essential to prove infringement
where likelihood of confusion already exists.” Henri’s Food Prods. Co., Inc. v. Kraft Inc., 717
F.2d 352, 359 (7th Cir. 1983). The court can infer likelihood of confusion, however, “when
there is proof of intentional copying because then ‘the adoption itself indicates that
defendants expected that likelihood to their profit.’”
Id. (quoting Tisch Hotels, Inc. v.
Americana Inn, Inc., 350 F.2d 609, 613 (7th Cir. 1965)).
“[I]f the infringer thinks
[consumers] will be confused that is some evidence they will be.” Blau Plumbing, Inc. v.
S.O.S. Fix-It, Inc., 781 F.2d 604, 611 (7th Cir. 1986). Mere knowledge of the senior user’s
8
Unity Health also points to evidence of concern about (and some evidence of actual
confusion) on the part of Meriter UnityPoint employees. As noted above, instances of
confusion not attributable to the relevant consumer group are entitled to less weight in the
analysis, Packman, 267 F.3d at 645, but evidence of confusion, or even concerns about
confusion by UnityPoint and its new Wisconsin affiliate certainly lends weight to Unity
Health’s argument that confusion is likely.
29
mark, however, is not enough to show intent on the part of the alleged infringer.
See
Barbecue Marx, 235 F.3d at 1046.
In its briefing, Unity Health conceded there is no evidence that UnityPoint intended
to palm off its services as those of Unity Health.
At the hearing, there was further
testimony not only that UnityPoint had no intention of capitalizing on Unity Health’s
goodwill, but also that Meriter did not come onto UnityPoint’s radar as a possible affiliate
until February of 2013 -- almost a year after UnityPoint had filed applications for the
UNITYPOINT, UNITYPOINT CLINICS and UNITYPOINT HEALTH marks. See U.S.
Trademark Application Serial No. 85614800 (filed May 2, 2012); U.S. Trademark
Application Serial No. 85614825 (filed May 2, 2012); U.S. Trademark Application Serial
No. 85614842 (filed May 2, 2012).9
C. Overview
After considering all of the above factors, the court concludes that Unity Health has
established a better-than-negligible chance of success on demonstrating a likelihood of
consumer confusion between its mark and UnityPoint within Unity Health Territory. The
marks have definite similarities when considered in terms of how they will be encountered
in the marketplace, and the area of use and the similarity of products at issue are also
factors that weigh strongly in Unity Health’s favor. There is also some evidence of actual
9
Unity Health suggests that there is some evidence of UnityPoint’s “indifference” to Unity
Health’s trademark rights, but the court disagrees. On the contrary, it appears that
UnityPoint has worked to mitigate the potential for confusion by altering its branding to
place the focus of its newly acquired marks, “Meriter” and “Physicians Plus,” rather than on
“UnityPoint,” even though doing so is inconsistent with its branding of other regional
hospitals UnityPoint has acquired. Thus, the court finds no evidence of bad faith in
UnityPoint’s adoption of the “UnityPoint” mark and brand.
30
confusion even at this early stage in the UnityPoint-Meriter affiliation. While the court also
found that consumers will generally exercise a reasonable degree of care in acquiring health
insurance and health care services, this evidence establishes at least some likelihood of
confusion. The court finds further support for this view in OCI’s decision that UnityPoint
must take affirmative steps to avoid consumer confusion between Unity Health and PPIC.
II. Lack of Adequate Remedy and Irreparable Harm
Unity Health argues that UnityPoint’s use of the UNITY mark will damage
consumer goodwill, as well as that this damage constitutes irreparable harm for which it
lacks a remedy at law. “[I]t is well settled that injuries arising from Lanham Act violations
are presumed to be irreparable, even if the plaintiff fails to demonstrate a business loss.”
Promatek Indus., Ltd. v. Equitrac Corp., 300 F.3d 808, 813 (7th Cir. 2002). Likewise, the
difficulty in assessing the damages associated with a loss of goodwill supports finding that
the plaintiff lacked an adequate remedy at law. Id.; see also Ty, Inc., 237 F.3d at 902 (noting
that “it is virtually impossible to ascertain the precise economic consequences of intangible
harms, such as damage to reputation and loss of goodwill, caused by [trademark]
violations”) (quoting Abbott Labs., 971 F.2d at 16); Meridian Mut. Ins. Co. v. Meridian Ins.
Grp., Inc., 128 F.3d 1111, 1120 (7th Cir. 1997) (noting that injury to goodwill “can
constitute irreparable harm for which a plaintiff has no adequate remedy at law”).
Because the court has found that Unity Health has demonstrated a better-thannegligible chance of success on its underlying Lanham Act claim, Unity Health likewise
enjoys a presumption of a lack of remedy at law and irreparable harm for preliminary
injunction purposes. UnityPoint’s only argument against a finding of irreparable harm is
31
that it is impossible to make such a finding where there is no probative evidence of
likelihood of confusion. See, e.g., Microware Sys. Corp. v. Apple Computer, Inc., 126 F. Supp.
2d 1207, 1218 (S.D. Iowa 2000) (“Microware at least has to demonstrate a likelihood of
confusion before it can conclude it has suffered irreparable harm.”) (citation omitted). As
already noted, however, the court found there is evidence of likelihood of confusion, and so
this argument fails.
III. The Balance of Hardships and the Public Interest
Finally, the court proceeds to the balancing phase of the preliminary injunction
analysis, which “in an attempt to minimize the cost of potential error, must somehow
balance the nature and degree of the plaintiff’s injury, the likelihood of prevailing at trial,
the possible injury to the defendant if the injunction is granted, and the wild card that is the
public interest.” Girl Scouts of Manitou Council, Inc., 549 F.3d at 1086 (internal citation and
quotation marks omitted). Unity Health rightly emphasizes that UnityPoint has neither
begun actively marketing its new affiliation with Meriter, nor established a presence in
southwestern Wisconsin.
In fact, Sinnard testified that:
UnityPoint and Meriter have
spent no money on marketing under the new brand in Wisconsin (Hr’g Tr. (dkt. #92)
61:24-62:5); there has been no affirmative branding in Wisconsin (id.); and UnityPoint has
“not yet” developed a reputation in the Wisconsin market. (Id. at 62:19-25; Sinnard Dep.
(dkt. #79) 53:9-12.) To enjoin UnityPoint from use of its new brand and marks containing
“Unity” in its name in southwestern Wisconsin would maintain the status quo, a point
Meriter’s President and CEO conceded at his January 24, 2014, deposition and at the
hearing this week. (See Woodward Dep. (dkt. #83) 71:2-11.)
32
In response, UnityPoint posits three possible harms that will result from the entry of
a preliminary injunction.
First, it argues that an injunction will frustrate the purpose
behind UnityPoint’s acquisition of Meriter and PPIC, which is to establish and grow them
as part of a single, more substantial health care system providing consistent care across
regions through rebranding and marketing itself in the Wisconsin market.
The court
recognizes that preliminarily enjoining use of the UnityPoint name would, in fact,
necessitate a variation in its preferred branding and advertising strategy, but the impact
from this seems minimal given that (1) no rebranding has yet taken place in Wisconsin, and
(2) as Sinnard testified, UnityPoint’s advertising varies from region to region and will do so
in Wisconsin in any event. (Hr’g Tr. (dkt. #92) 63:12 (“We change our ads in every region
currently.”).) In fact, UnityPoint has already voluntarily altered its branding in Wisconsin
by arranging its proposed logos to emphasize the “Meriter” portion of the name, whereas
the logos of its other hospitals use “UnityPoint” in the dominant position. (Id. at 63:1-9.)
Additionally, as Woodward testified, there are no current plans to spend the money
necessary to rebrand Meriter. (Id. at 47:1-3.) Thus, the potential impact in this respect
seems minimal and, even if it delays certain expenditures and rebranding, this short term
interruption does not preclude the strategy from ultimately being rolled out should
UnityPoint ultimately prevail.
The same cannot be said if Unity Health prevails after
UnityPoint has caused confusion and ill-will in its market.
Second, UnityPoint argues that an injunction would damage its reputation in
Wisconsin and would be perceived by the public as a sign of inconsistency and instability.
The court is not persuaded that this is true, particularly since UnityPoint concedes it has
little, if any, reputation in Wisconsin to date, and its affiliation with Meriter has not been
33
publicized beyond two press events held in October 2013 and in January 2014. In any
event, the court does not believe that UnityPoint’s compliance with a court order will lead
consumers to believe that either UnityPoint or Meriter is “unstable” or “unable to adapt” to
the changing health care industry.
Third, UnityPoint argues that Meriter may be harmed by its inability to market the
new affiliation with UnityPoint. To some extent, the court credits this concern. Meriter’s
ability to align itself with a relatively large regional care provider may very well increase
consumer confidence in its financial status and the quality of integrated care it can provide,
and an injunction would certainly limit its ability to take full advantage of that new
affiliation.
Again, however, this potential harm is somewhat mitigated by the fact that
Meriter has apparently not yet taken any action to promote the affiliation, nor has it
expended any resources on doing so beyond sending a letter to its customers and holding
the two, free press events. At worst, a preliminary injunction would only require Meriter to
delay taking affirmative steps to rebrand itself as a UnityPoint affiliate.
Likewise, UnityPoint provides little evidence that the public interest will be better
protected by refusing to enter a preliminary injunction. “In trademark infringement cases,
[the Seventh Circuit has] stated that ‘the relevant consideration [in determining whether
the public interest will be disserved by the grant of an injunction] is the consumer’s interest
in not being deceived about the products they purchased.” Int’l Kennel Club, 846 F.2d at
1092 n.8 (quoting A.J. Canfield Co. v. Vess Beverages, Inc., 796 F.2d 903, 909 (7th Cir.
1986)). Given that the court has found some likelihood of confusion among consumers -who may purchase insurance through Unity Health on the mistaken assumption that they
will get coverage at UnityPoint hospitals and clinics, or who may avail themselves of
34
UnityPoint health services only to discover later that their Unity Health insurer does not
cover those services -- the court finds that the public would be best served by entering some
form of preliminary injunction minimizing the likelihood of confusion until trial.
The court has the ability to tailor the terms of such an injunction “so as to minimize
and limit the harm to the defendant.” Id. at 1092. The court has found the likelihood of
confusion greatest in the prospective use of the word “Unity” or “unity” standing alone -for instance, in the use of the tagline “The point of unity is you” -- and in any prospective
connection between Physicians Plus and UnityPoint, since Physicians Plus is Unity Health’s
direct competitor.
Accordingly, UnityPoint will be enjoined from employing the word
“unity” as a stand-alone word.
This injunction should prove minimally harmful, since
UnityPoint has not yet planned any advertising and James Woodward testified that, in the
short term, the tagline was not as relevant to UnityPoint as the use of the terms
“UnityPoint Health Clinic” and “UnityPoint At Home.” (See Hr’g Tr. (dkt. #92) 24:2025:6.)
UnityPoint will also be enjoined from marketing PPIC’s connection with
UnityPoint. This, too, should not significantly affect UnityPoint in the short term, as Kevin
Vermeer, UnityPoint’s Executive Vice President and Chief Strategy Officer, acknowledged.
(See Hr’g Tr. (dkt. #90) 145:24-146:5.)
Furthermore, UnityPoint will be enjoined from marketing its health care services
without the “Meriter” mark as the dominant portion of its mark; this is to say, should it go
forward with its proposed rebranding of Meriter at this time, it must use the logos and mark
as represented to this court and may not brand its services as offered by “UnityPoint” (or its
variations) standing alone. This will minimize the likelihood of confusion by placing the
35
focus on the “Meriter” mark, and it should not prove harmful to UnityPoint, since it had
planned to use this branding in any event.
Nevertheless, the court recognizes that even this limited preliminary injunction could
prove harmful to UnityPoint, at least in the short term, as it potentially delays certain
benefits it hoped to achieve in acquiring Meriter and PPIC. If Unity Health is ultimately
unsuccessful at trial, UnityPoint will have lost time in establishing itself as a health care
provider in this market and in marketing itself as an integrated provider of health care and
health insurance alike. Its ability to market its patient-centered approach, at least through
its desired branding, will also be delayed. (See Hr’g Tr. (dkt. #90) 145:12-23.) While the
balance of harms favors entering the a preliminary injunction to maintain the status quo,
the court has endeavored to enter a narrowly tailored one and will endeavor to move this
matter along quickly so that the preliminary injunction need not be in place for long.
Relatedly, the court’s preliminary injunction should be construed reasonably by both sides
to allow (1) UnityPoint’s innocuous use of the word “unity” in a non-marketing context; (2)
UnityPoint, Meriter and PPIC to continue to disclose to patients and customers the new
affiliation among them; and (3) UnityPoint to use its standard brochures, pamphlets and
related materials in the ordinary course of providing health care services at Meriter and/or
Physician Plus locations without having to incur the cost of rebranding in Wisconsin.
At least on the current record, this remains an extremely close case. Although Unity
Health’s case on the merits is not overwhelming, UnityPoint’s own evidence suggests that
certain embodiments of its mark, such as the word “unity” standing alone or the branding of
UnityPoint with PPIC, are less important to its brand, leading to the conclusion that
preliminarily enjoining those embodiments would cause little immediate harm.
36
When
weighed against the harm that Unity Health may suffer from a misappropriation of its
goodwill in this market, the balance of the harms tilts in Unity Health’s favor. In the
context of the Meriter-UnityPoint affiliation and mark, however, the court has found both a
smaller likelihood of confusion (particularly given the degree of consumer care and the
relatively weak nature of the claimed “Unity” mark) and a greater likelihood of harm to
Meriter and UnityPoint upon injunction.
“[T]rademark protection should not interfere
with the traditional policies of a competitive market, and courts have generally recognized
that the public substantially benefits from competition.” Platinum Home Mortgage Corp., 149
F.3d at 726. Accordingly, even though Meriter has yet to begin active marketing of its
affiliation, the court is not persuaded that it is appropriate to enter an injunction wholly
preventing UnityPoint from beginning to make a place for itself in this market under its
own name in the limited way it currently proposes, understanding, of course, that it does so
at its own risk.
Finally, in addition to entry of the preliminary injunction below, the court will hold a
telephonic scheduling conference with the parties on Friday, February 7, 2014, at 1:30 p.m.
to set an expedited discovery, motion and trial schedule of this matter, as well as to consider
the possible designation of a neutral branding expert and address any questions or concerns
regarding the language or scope of the court’s preliminary injunction.
encouraged to meet and confer in advance on all of these issues.
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The parties are
ORDER
IT IS ORDERED that:
1. UnityPoint and its affiliates are preliminarily enjoined from:
(a) using “Unity” or “unity” as a stand-alone word in any of its advertising,
marketing materials, logos or marks within the Unity Health Territory as
defined above;
(b) advertising or otherwise marketing any of its health insurance or related
services as offered by UnityPoint on a stand-alone basis in the Unity Health
Territory as defined above, although it may describe Meriter as an affiliate of
UnityPoint Health, UnityPoint Clinic, or UnityPoint At Home provided that
Meriter is the dominant mark; and
(c) advertising, marketing, referring to, or otherwise indicating its affiliation with
Physicians Plus Insurance Company in the Unity Health Territory.
2. A telephonic scheduling conference will be held on Friday, February 7, 2014, at 1:30
p.m. with plaintiff’s counsel to initiate the call.
Entered this 5th day of February, 2014.
BY THE COURT:
/s/
________________________________________
WILLIAM M. CONLEY
District Judge
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