CoVantage Credit Union v. Blue Cross Blue Shield of Mich. Mut. Ins. Co.
| Decision Date | 16 March 2022 |
| Docket Number | 21-12559 |
| Court | U.S. District Court — Eastern District of Michigan |
| Parties | COVANTAGE CREDIT UNION, Plaintiff, v. BLUE CROSS BLUE SHIELD OF MICHIGAN MUTUAL INSURANCE COMPANY, Defendant. |
COVANTAGE CREDIT UNION, Plaintiff,
v.
BLUE CROSS BLUE SHIELD OF MICHIGAN MUTUAL INSURANCE COMPANY, Defendant.
No. 21-12559
United States District Court, E.D. Michigan, Southern Division
March 16, 2022
OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS AND GRANTING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
DAVID M. LAWSON UNITED STATES DISTRICT JUDGE
The plaintiff filed its complaint under the Lanham Act and state law seeking to enjoin the defendant from using certain trademarks incorporating the CoVantage name. The plaintiff also filed a motion for a preliminary injunction. The defendants answered the motion for a preliminary injunction and countered with a motion to dismiss, arguing that the plaintiff has not established standing and therefore the Court lacks subject matter jurisdiction, and the complaint fails to state any viable claims. The Court held an evidentiary hearing on the motion for preliminary injunction December 14, 2021. The motion to dismiss is fully briefed, and oral argument will not assist in its disposition. The Court, therefore, will decide that motion on the papers submitted. E.D. Mich. LR 7.1(f)(2).
The plaintiff has alleged a concrete and imminent injury and has established the other requisites of standing. Therefore, the Court has subject matter jurisdiction over the dispute. The plaintiff also has pleaded viable claims in the complaint and has demonstrated a likelihood of success on the merits of those claims. Balancing the other pertinent factors favors the issuance of
a preliminary injunction preventing the defendant from using the infringing mark. The motion to dismiss will be denied and the motion for preliminary injunction will be granted.
I.
A.
According to the complaint, plaintiff CoVantage Credit Union has operated under the name “CoVantage” at least since 2000. Compl., ¶¶ 7-8, ECF No. 1, PageID.2-3. Today, it offers credit union, banking, business administration, and other services to 135, 000 members nationwide through its website, www.covantagecu.org; through mobile banking apps, like MyCoVantage; and in-person at nineteen brick-and-mortar locations across Michigan and Wisconsin, where it is headquartered. Id. at ¶¶ 1, 11-12, PageID.1, 4. The plaintiff also offers insurance and other financial services to its business members and their employees, as well as Health Savings Accounts, which some members use to pay Medicare Advantage premiums. Id. at ¶¶ 14-15, 47, PageID.6-7, 13. In addition, since 2016 the plaintiff has operated a charitable arm, the CoVantage Cares Foundation, through which it has provided nearly $2 million in grants. Id. at ¶ 16.
The plaintiff alleges that it has won certain acclaim for these activities. Credit union industry research firm Callahan & Associates ranked the plaintiff first in the nation for returning value back to members in 2020, S&P Global Market Intelligence has ranked the plaintiff as a top 50 best performing credit union in the country, and Forbes ranked it as the best credit union in Wisconsin in 2021. Id. at ¶ 18. The plaintiff also extensively advertises under its COVANTAGE marks on television, print, radio, signage, and online channels, to the point, the plaintiff alleges, that people associate it with the term “CoVantage.” Id. at ¶¶ 20-21, PageID.7. At least the first full page of Google search results for the term “covantage” are related to the plaintiff. Id. at ¶ 23.
The plaintiff owns two registered trademarks that include the term COVANTAGE. It registered the first, COVANTAGE CREDIT UNION, on June 26, 2005 in International Class 36. Registration No. 2, 976, 076, ECF No. 1-2, PageID.24. The mark includes an illustration of the word “CoVantage” in large letters above the words “CREDIT UNION” in smaller type and alongside a graphic of two non-concentric half ovals. Ibid. The “CREDIT UNION” portion of the mark is disclaimed. Ibid. The plaintiff has used the mark in connection with “credit union services” since December 20, 2000. Ibid. The plaintiff registered the second mark, COVANTAGE CARES, on September 27, 2016, also in International Class 36. Registration No. 5, 051, 308, ECF No. 1-3, PageID.28. The mark consists of the word “CoVantage” with the letter “V” depicted as a heart above cursive script of the word “cares.” Ibid. The plaintiff uses the mark for “charitable fundraising services” and disclaimed the “CARES” portion of the mark. Ibid.
CoVantage alleges that Blue Cross, knowing about the plaintiff's marks, attempted to register confusingly similar marks designated as COVANTAGE HEALTH PARTNERS & DESIGN and COVANTAGE HEALTH PARTNERS. The applications expressed an intent to use the marks for holding company services that include business management and administration services for managed care insurance, financial records management, and capital funding. The applications disclaimed the use of all language except “COVANTAGE.” The plaintiff alleged that Blue Cross's putative marks are confusingly similar to CoVantage's marks and that Blue Cross seeks registration of the marks in the same International Class. And the plaintiff asserted that Blue Cross was aware of the plaintiff's good will and reputation connected to its COVANTAGE marks, and therefore Blue Cross adopted its similar marks in bad faith. Finally, the plaintiff alleges that at least some of the services in which the two companies will involve themselves, including health
savings accounts and other financial services, overlap, and that they operate in the same geographical area.
B.
The parties developed additional facts through affidavits and testimony at the preliminary injunction hearing. Sherry Aulik, an executive vice-president at CoVantage, averred that the credit union offers Health Savings Accounts to its business members and their employees. Brett Lee, the credit union's chief retail officer, confirmed that CoVantage offers many kinds of insurance, including auto, home, life, disability, and other insurance plans. Between its credit union and charitable activities, the plaintiff allegedly spends more than $1 million annually advertising services under the two marks.
At the hearing, Lee testified that the plaintiff uses “CoVantage” signage at all of its branch locations. The signage does not include the words “Credit Union” beneath the word “CoVantage.” Lee testified that the plaintiff also uses “CoVantage” as a stand-alone term on its mobile application and in periodical advertisements. Lee said that members commonly refer to the plaintiff as “CoVantage.”
The plaintiff does not own the mark for the stand-alone term “COVANTAGE.” That mark was formerly registered to PacifiCare Life and Health Insurance Company, a UnitedHealth subsidiary, but was canceled on April 10, 2020 due to nonuse. The insurer stopped using the mark when it changed the name of its “CoVantage” business to “ProcessWorks” in 2007. The only other mark incorporating COVANTAGE was registered by Apex Data Services, but its registration was also canceled for nonuse in 2016. No. other registered marks currently include the term COVANTAGE. Another credit union has registered VANTAGE CREDIT UNION marks, and
two other credit unions have registered marks that include the term VANTAGE. Roughly fifteen credit unions have registered marks that include the term ADVANTAGE.
According to Lee, the insurance products offered by the plaintiff through a third-party insurer, TruStage Insurance, include auto, home, life, accidental death and dismemberment, credit, guaranteed asset protection, long-term care, and disability insurance. TruStage offers health insurance products, although not in partnership with the plaintiff. But Lee said that there is nothing preventing the plaintiff from partnering with TruStage to offer health insurance in the future and that credit unions commonly offer such services. Lee also testified that the plaintiff offers health savings accounts to its members.
Lee testified that the plaintiff offers services under its COVANTAGE marks to businesses in the health and managed care industry, including business lending, financial services, and investment capital funding. The plaintiff offers these services to certain business members that, in turn, offer health insurance and Medicare Advantage Plans. Lee said that at least one other credit union offers Blue Cross Blue Shield health plans, including a “Blue Advantage” plan.
Lee insisted that, as a credit union, the plaintiff's reputation is vital. He opined that the defendant's use of COVANTAGE marks jeopardizes the trust the plaintiff long has built with its customers and the control the plaintiff has over its brand. He admitted that the plaintiff is not licensed to provide Medicare Advantage insurance coverage, does not sell Medicare Advantage coverage, does not provide any expertise regarding how to operate a complaint Medicare Advantage plan, and does not form joint ventures with Blue Cross Blue Shield plans. And he conceded that, if its members purchase insurance products through CoVantage Credit Union, they must manage their coverage by contacting the plaintiff's third-party insurance partners directly.
However, he also testified that TruStage co-brands insurance products offered in partnership with the plaintiff by using the CoVantage logo.
Lee could not point to any instance of any CoVantage Credit Union members confusing the parties. He is not aware that the plaintiff yet has received any misdirected mail, confusing press coverage, or complaints as the result of the defendant's use of COVANTAGE marks. But he said that the plaintiff has not conducted a survey or study regarding the defendant's use of COVANTAGE marks.
According to Pritpal Virdee, the president of Covantage Health Partners, Inc., Blue Cross's subsidiary, Blue Cross founded Covantage Health in 2019 as a subsidiary of its Emergent Holdings, Inc., business unit. Id. at ¶...
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