National Ass'n of Blue Shield Pl. v. United Bankers L. Ins. Co.
| Decision Date | 16 June 1966 |
| Docket Number | No. 21920.,21920. |
| Parties | NATIONAL ASSOCIATION OF BLUE SHIELD PLANS and Group Medical & Surgical Service, Appellants, v. UNITED BANKERS LIFE INSURANCE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Philip R. Overton, Austin, Tex., Melville Owen, A. Donham Owen, San Francisco, Cal., Howard Hassard, San Francisco, Cal., of counsel, for appellants.
Mark Smith, Smith & Smith, Lubbock, Tex., for appellee.
Before JONES and THORNBERRY, Circuit Judges, and SLOAN, District Judge.
The appellant, National Association of Blue Shield Plans, is a non-profit Illinois corporation. It is an association of local nonprofit organizations which provide hospitalization and healthcare insurance in the areas in which they operate. Each of these local operations, which are called plans, is sponsored by a medical society in its locality. The appellant, Group Medical & Surgical Service, is the Texas component. One of the benefits flowing from membership in the Association is the right to use its service marks in naming and promoting the member's insurance policies.
The Association owns the following federally registered service marks:
No. 557,037 word mark Blue Shield
No. 557,040 word mark Blue Shield1
No. 562,430 symbol mark a blue shield
No. 591,778 symbol mark a blue shield with a caduceus
thereon
No. 617,304 symbol mark a shield with a caduceus thereon
The first four marks were found to be uncontestable under 15 U.S.C.A. § 1115 (b), and all the marks were found to be nondescriptive of medical insurance. None of these findings have been specified as erroneous.
Group Medical owns as trustee for the National Association the following Texas registrations:
No. 14,255 a shield symbol with Group
Medical's name thereon
No. 16,609 a blue shield
No. 23,418 a shield with a caduceus thereon
No. 23,419 the word mark Blue Shield
No. 23,420 a shield symbol
The appellee, United Bankers Life Insurance Company, markets hospitalization insurance which is of the same general sort as that provided by the Blue Shield plans. Some of this insurance has been advertised and sold under the designation Red Shield or Improved Red Shield. United has used a shield symbol, bearing a white cross with the word United above the cross and the word Bankers below, in conjunction with the advertising and sale of these policies. The word and symbol marks have been represented in various colors, including the color blue. Upon complaint by the National Association, the district court found that the words "red shield" and "improved red shield" and the shield symbol were colorable imitations of the Association's marks and were likely to cause confusion when printed in the color blue, but not otherwise.2 It is from these findings and the injunction entered pursuant thereto that the National Association appeals.
United Bankers concedes that use of its marks in the color blue constituted infringement, but asserts the district court was correct in finding their use in other colors was not likely to cause confusion. It stresses the well-settled law that findings as to likelihood of confusion are factual and not to be overturned unless clearly erroneous. E. g., Sun-Maid Raisin Growers v. Sunaid Food Products, Inc., 5th Cir. 1966, 356 F.2d 467, and cases cited therein. We are asked not to "fetter the ancient `Red Shield' which was carried in freedom and with honor by Sir Galahad according to legend — and by Sir Lancelot. * * *" We find the shield must, indeed, be fettered to the extent that it is sought to be used to designate hospitalization insurance.
The confusion which is possible here is of two sorts, that which is commonly designated confusion of goods and that which is called confusion of business. That is, a purchaser of one of United's Red Shield plans might be under the impression that he was purchasing one of Group Medical's extensively advertised and highly regarded, although perhaps only vaguely remembered, Blue Shield policies,3 or he might think that the Red Shield service or, particularly, the Improved Red Shield policy was a modification or extension of the Blue Shield insurance of which he had heard. In the latter case, the confusion would be in the assumption that both the blue and the red emanated from the same source. See generally 3 Callman, Unfair Competition & Trade-Marks §§ 80.1, .2 (2d. ed. 1950).
The district court found both types of confusion to be likely, but only where the accused marks were used in the color blue. It is this distinction which we cannot understand and must find clearly erroneous.
The evidence shows that United Bankers commenced using the marks here in question in 1950 at the suggestion of the manager of its hospitalization department. The manager had been active in the hospitalization-insurance field before going with United Bankers. While there is no testimony that the manager knew of the Blue Shield plans, it is inconceivable that he could have been associated with hospitalization insurance and not have been at least aware of if not familiar with a group which held such a prominent position in the field.4
United continued extensive use of the Red Shield marks until 1955. At that time, it changed its promotional technique so as to deemphasize direct mail campaigns. It was in these direct mail advertisements that the Red Shield predominated. Shortly prior to this change in United Bankers' selling program, the National Association had first learned of the Red Shield and had notified United that it was infringing the Blue Shield service marks. It is brought out that about this same time, the National Association brought suit against another alleged infringer, National Bankers Life Insurance Company, for infringement by its Blue Seal policies. National and United were co-tenants of the same office building and the presidents of the two companies were acquainted. It is established that the president of United was aware of the pending litigation against National. Although the president of United testified that his restriction of Red Shield advertisement was in no way connected with the activities of the National Association, the inference that he acted to forestall an action for infringement is permissible.
Whatever may have motivated the partial disuse of the red shield in 1955, it was renewed in 1959, because, in the words of United's president, "I thought I could do better with the old system, and then I started under the old program of advertising again."
The district court made no finding on the question of intent on the part of United Bankers to confuse and deceive the public, but the evidence...
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