Pedi-Care, Inc. v. Pedi-A-Care Nursing, Inc.

• Decision Date: 19 March 1987
• Docket Number: Civ. A. No. 86-3715.
• Citation: 656 F. Supp. 449
• Parties: PEDI-CARE, INC., Plaintiff, v. PEDI-A-CARE NURSING, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

656 F. Supp. 449

PEDI-CARE, INC., Plaintiff, v. PEDI-A-CARE NURSING, INC., Defendant.

Civ. A. No. 86-3715.

United States District Court, D. New Jersey.

March 19, 1987.

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Roger W. Herrell, Robert G. McMorrow, Jr., and Dann Dorfman, Herrell & Skillman, Philadelphia, Pa., for plaintiff.

Needleman, Needleman, Caney, Stein & Kratzer, Ltd., Collingswood, N.J., for defendant.

RODRIGUEZ, District Judge.

This case is before the court on the motion of plaintiff Pedi-Care, Inc. for a preliminary injunction to enjoin defendant Pedi-A-Care Nursing, Inc. from continuing to do business under its name on the grounds that defendant's use of a name which is confusingly similar to plaintiff's registered service mark¹ constitutes an infringement of that service mark under the Lanham Trade-Mark Act, 15 U.S.C. §§ 1051-1127 (1982) as well as unfair competition under New Jersey common law.²

Plaintiff is a Pennsylvania corporation engaged in the business of providing in-home pediatric health care and nursing services. Its principal place of business is in Hatfield, Pennsylvania. Plaintiff began doing business in Pennsylvania in February 1983 and has experienced rapid growth in the number of patients served since that time. Plaintiff began serving New Jersey patients in April 1984. There is no indication in the record, however, as to the percentage of plaintiff's patients that are New Jersey residents. On September 9, 1985 plaintiff qualified for a Certificate of Authority to transact business in New Jersey and continues to transact business here. On May 27, 1986 plaintiff's service mark, Pedi-Care, Inc., was registered on the principal register of the U.S. Patent and Trademark Office.

Defendant is a New Jersey corporation engaged in the same business as plaintiff. Defendant was incorporated on May 14, 1985 under the name Pedi-A-Care Nursing, Inc. and has since operated under that name. Its principal place of business is in Hammonton, New Jersey.

Defendant claims that it does business solely in a seven-county area in New Jersey south of Mercer County³ and that it has no intention of expanding its service area beyond these seven counties. Defendant presently serves only one patient and at no time since its inception has it served more than five patients.

ANALYSIS

To obtain a preliminary injunction the moving party must show (1) a reasonable probability of eventual success in the litigation, and (2) that irreparable injury will ensue if relief is not granted. West Indian Co., Ltd. v. Government of the Virgin Islands, 812 F.2d 134, 135 (3d Cir.1987); Kennecott Corp. v. Smith, 637 F.2d 181, 187 (3d Cir.1980). In addition, the court may consider the possibility of harm to other interested persons from the grant or denial of relief, and the public interest. Kennecott, 637 F.2d at 187.

PROBABILITY OF SUCCESS IN THE LITIGATION

In order to prevail on a statutory or common law trademark or service mark infringement claim, the plaintiff must establish that the names or symbols are valid, legally protectible trademarks or service marks; that they are owned by the plaintiff; and that the defendant's subsequent use of the same or similar marks to identify goods or services is infringing, i.e., is likely to create confusion as to the origin of the goods or services. Estate of Presley v. Russen, 513 F.Supp. 1339, 1362 (D.N.J. 1981) (citations omitted). Plaintiff claims the exclusive right to use its service mark in the market area served by defendant. It asserts that defendant's use of the name Pedi-A-Care Nursing, Inc. is a colorable imitation of plaintiff's service mark that is likely to cause confusion.

LANHAM ACT CLAIM

15 U.S.C. § 1114 provides in relevant part:

(1) any person who shall, without the consent of the registrant —

(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark ... in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; ...

shall be liable in a civil action by the registrant ...

In order for plaintiff to establish defendant's liability under this section it would need to show that defendant has used or is using a colorable imitation⁴ of plaintiff's registered service mark and that this use is likely to cause confusion, mistake or deception. Plaintiff contends that defendant's use of the name Pedi-A-Care Nursing, Inc. is likely to cause confusion of the public.

As evidence of its right to use its service mark to the exclusion of defendant, plaintiff relies upon 15 U.S.C. § 1115(a), which provides in relevant part:

(a) Any registration ... of a mark registered on the principal register provided by this chapter and owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of registrant's exclusive right to use the registered mark ... but shall not preclude an opposing party from providing any legal or equitable defense or defect which might have been asserted if such mark had not been registered.

Defendant argues in opposition that when it began using its name it had no knowledge of plaintiff's prior use of its service mark. Defendant also points out that it began using its name before plaintiff's service mark became registered. Defendant therefore contends that these factors provide a defense sufficient to overcome any right which plaintiff claims to use its service mark in defendant's marketing area.

Just as § 1115(a) provides that a registered mark is prima facie evidence of the registrant's exclusive right to use its mark, § 1115(b) provides that the registration of a mark which has become incontestable⁵ constitutes conclusive evidence of the registrant's right to use the mark, except when certain defenses or defects are established. The defenses provided by subdivisions (1) through (6) of subsection (b) also apply to registrations which have not yet become incontestable, such as plaintiff's registration. Matador Motor Inns, Inc. v. Matador Motel, Inc., 376 F.Supp. 385 (D.N.J. 1974).

Defendant relies upon the defense made available by § 1115(b)(5) which, when read in conjunction with § 1115(a), would accord prima facie evidentiary status to plaintiff's exclusive right to use the service mark unless defendant is able to establish:

That the mark whose use by a party is charged as an infringement was adopted without knowledge of the registrant's prior use and has been continuously used by such party ... from a date prior to registration of the mark....

15 U.S.C. § 1115(b)(5).

Here defendant has continually used its name since its incorporation, which was more than one year before the plaintiff's mark became registered on the principal register. Defendant claims that it adopted its name without knowledge of plaintiff's prior use of its mark. Therefore, if defendant is able to establish this lack of knowledge it would be entitled to the defense provided by § 1115(b)(5). However, this alone would not defeat plaintiff's right to exclusively use its service mark, but would merely impugn the status of plaintiff's registration as prima facie evidence of an exclusive right to use the mark. This is because it is the appropriation and use, and not federal registration, of a mark which gives rise to the right to use it. Wiener King, Inc. v. Wiener King Corp., 407 F.Supp. 1274 (D.N.J.1976), rev'd and remanded without published opinion, 546 F.2d 421 (3d Cir.1976), cert. denied, 430 U.S. 916, 97 S.Ct. 1328, 51 L.Ed.2d 594, aff'd 577 F.2d 731 (3d Cir. 1978). The Lanham Act does not create the right to a mark, it only recognizes the right acquired through use. Id. at 284, citing, Radio Shack Corp. v. Radio Shack Inc., 180 F.2d 200 (7th Cir.1950). This is a common law right which exists independently of statutory registration provisions. Caesar's World, Inc. v. Caesar's Palace, 490 F.Supp. 818 (D.N.J.1980). Therefore, in order to assess the probability that plaintiff will be successful in this litigation, it is necessary to examine the common law claim that plaintiff asserts.

COMMON LAW CLAIM

Through its appropriation of the service mark Pedi-Care, Inc. in February 1983 and its use of the mark since that time, plaintiff has established a common law service mark right. Assuming the same market area, a trademark-⁶ owner, having proved priority of appropriation and use, is afforded protection if the subsequently used mark would be likely to cause confusion of the source or origin of the goods or services involved. 407 F.Supp. at 1280, citing Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 415, 36 S.Ct. 357, 361, 60 L.Ed. 713 (1916).

In order to determine whether a likelihood of confusion exists,⁷ a four-prong test is applied.⁸ Christian Science Bd. of Directors v. Evans, 191 N.J.Super. 411, 467 A.2d 268 (Ch.Div.1983). The court must examine: (1) the degree of similarity between the protected mark and the allegedly infringing mark; (2) the intent of the defendant in adopting its mark; (3) the relation in use and manner of marketing between the services marketed by defendant and those marketed by plaintiff; and (4) the degree of care likely to be exercised by purchasers.

Performing this analysis, the court finds a high degree of similarity between the names Pedi-Care and Pedi-A-Care. Regarding defendant's intent in adopting its name, the affidavits of defendant's principals assert that they were unaware of plaintiff's existence when they incorporated under the Pedi-A-Care name. There is no evidence of record to contradict this assertion. The services of plaintiff and defendant are highly similar in their use and manner of marketing. The same patients would ordinarily be candidates for the services of both. The services would be marketed primarily through advertisements, as well as through referrals, mostly from hospital staff members. Finally, although the services are rendered in an industry that is imbued with a public interest, given the...