UHS of Del., Inc. v. United Health Servs., Inc.

• Decision Date: 29 December 2016
• Docket Number: CIVIL ACTION NO. 1:12–CV–485
• Citation: 227 F.Supp.3d 381
• Parties: UHS OF DELAWARE, INC., Plaintiff v. UNITED HEALTH SERVICES, INC., et al., Defendants
• Court: U.S. District Court — Middle District of Pennsylvania

227 F.Supp.3d 381

UHS OF DELAWARE, INC., Plaintiff

v.UNITED HEALTH SERVICES, INC., et al., Defendants

CIVIL ACTION NO. 1:12–CV–485

United States District Court, M.D. Pennsylvania.

Signed December 29, 2016

Martin W. Hayes, Williams Mullen, Tysons Corner, VA, Robert C. Van Arnam, Williams Mullen P.C., Raleigh, NC, Thomas B. Schmidt, III, Tucker R. Hull, Pepper Hamilton, LLP, Harrisburg, PA, William P. Dickinson, III, Williams Mullen, Richmond, VA, for Plaintiff.

Brian K. Wunder, Andrews Kurth LLP, Houston, TX, Charles M. Crout, Matthew J. Dowd, Sushila Chanana, Robert A. Gutkin, Andrews Kurth LLP, Washington, DC, Timothy J. Nieman, Rhoads & Sinon LLP, Harrisburg, PA, for Defendants.

MEMORANDUM

Christopher C. Conner, Chief Judge

The instant matter arises from a trademark dispute between plaintiff UHS of Delaware, Inc. ("UHS Delaware") and defendants United Health Services, Inc., ("United Health Services"), United Health Services Hospitals, Inc., Professional Home Care, Inc., Twin Tier Home Health, Inc., Ideal Senior Living Center, Inc., Ideal Senior Living Center Housing Corporation, Delaware Valley Hospital, Inc., and United Medical Associates. Before the court are UHS Delaware's motion (Doc. 150) for summary judgment and defendants' motion (Doc. 151) for partial summary judgment.

I. Factual Background and Procedural History¹

The factual background of this case is detailed in several prior opinions, familiarity with which is presumed.² UHS Delaware is the healthcare management company for Universal Health Services, Inc. ("Universal"). (Doc. 157, Ex. 1 ¶ 3).³ Universal's subsidiaries own and operate more than 235 acute care and behavior health facilities and surgery centers in a number of states throughout the country. (Id. ) Universal owns no subsidiaries or affiliates, and does not operate, in the state of New York. (See Doc. 153, Ex. D at 3–4). UHS Delaware does not itself provide healthcare services; instead, it manages an affiliated network of healthcare service providers. (See Doc. 157, Ex. 1 ¶ 3).

UHS Delaware owns federal registrations for two trademarks: (1) the UHS word mark, bearing U.S. Registration No. 1,696,433 ("the '433 mark"), and (2) the UHS stylized mark, bearing U.S. Registration No. 2,741,663 ("the '663 mark") for use in connection with hospital services and hospital management services. (Id. Exs. 2, 4; see Doc. 155 ¶ 1; Doc. 161–5 ¶ 1). The stylized mark appears as follows:

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(Doc. 157, Ex. 4). UHS Delaware owns both marks via assignment from its parent, Universal. (Id. Ex. 6). The '433 registration issued on June 23, 1992, and the '663 registration issued on July 29, 2003. (Doc. 153 ¶¶ 27–28; Doc. 157, Exs. 2, 4). The marks have achieved "incontestable" status under the Lanham Act. (Doc. 155 ¶ 1; Doc. 161–5 ¶ 1); see also 15 U.S.C. § 1065.

Defendants are eight nonprofit corporations which together comprise an integrated healthcare system headquartered in the southern tier of New York. (Doc. 153 ¶¶ 1, 5–14). Defendants include: (1) United Health Services, the healthcare system's parent entity; (2) United Health Services Hospitals, Inc., a subsidiary of United Health Services which operates, inter alia , Binghamton General Hospital, Ideal/Wilson Medical Center, and eighteen physician practice clinics; (3) Delaware Valley Hospital, Inc., a 25-bed critical access hospital; (4) Professional Home Care, Inc., an advanced home care service; (5) Twin Tier Home Health, Inc., a certified home health care agency; (6) Ideal Senior Living Center, Inc., a skilled nursing facility and long term home health care program; (7) Ideal Senior Living Center Housing Corporation, an independent living and adult care facility; and (8) United Medical Associates, P.C., a multi-specialty medical practice group comprising 185 physicians and 128 advanced practice providers. (Id. ¶¶ 5–14). United Health Services does not have any facilities outside of New York state. (Id. ¶ 2).

The United Health Services healthcare system began using the acronym "UHS" in approximately 1982. An employee newsletter issued that year was titled "UHS Life." (Id. ¶ 17). Defendants issued seven subsequent newsletters titled "The UHS News" between 1983 and 1990. (Id. ) United Health Services also used "UHS" in occasional pamphlets and certain annual reporting. (Id. ) News articles and reports regularly referred to the system as "UHS" during this time. (Id. ¶ 22). In 1990 or 1991, United Health Services erected monument signs outside of the Binghamton and Wilson hospitals. (Id. ¶ 20). Each sign was approximately six feet tall, boasting a large "United Health Services" seal and the hospital's name, followed by subscript stating "United Health Services Hospitals" and "A Member of the UHS Health Care System." (Doc. 153–3 at 46, 66–67). United Health Services registered its domain name—www.uhs.net—in July 1997. (Doc. 153 ¶ 25).

United Health Services adopted a new system wide brand in 1997. (See Doc. 155 ¶ 5; see also Doc. 161–5 ¶ 5). The rebranding initiative aimed to create a unified corporate identity, structured around the following logo:

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(See Doc. 157, Ex. 47). The branding guidelines issued to all United Health Services entities stated: "There should be no variation in the logo. This will maintain clarity and consistency throughout our system." (Id. at 4).

Christina Boyd ("Boyd"), Vice President of Community Relations for the United Health Services system, testified that system entities were required to and did comply with the new branding policy, except for isolated incidents of "rogue" advertisements by individual system entities. (Doc. 155 ¶ 7; Doc. 161–5 ¶ 7). The record reflects that from 1997 until 2010, United Health Services displayed the new logo on its website and included the logo in weekly employee newsletters, system periodicals, annual reports, and advertisements. (Doc. 163, Ex. A, UHSHI 30(b)(6) Dep. (Boyd) 70:15–76:19, 79:5–82:18, 96:12–15, 99:4–102:23, 108:22–110:7 (Jan. 14, 2016)).

United Health Services began a new rebranding effort in 2009. (Doc. 155 ¶ 8; Doc. 161–5 ¶ 8). The 2009 rebranding initiative was led by Boyd and a centralized steering committee—called Integration, Too!—which included members of each subsidiary's executive team as well as certain business unit leaders. (Doc. 155 ¶ 8; Doc. 161–5 ¶ 8; see also Doc. 157, Ex. 19, UHSHI 30(b)(6) Dep. (Carrigg) 35:25–37:11 (Jan. 15, 2016)). On August 20, 2009, the Integration, Too! committee agreed to adopt the following system wide logo:

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(Doc. 155 ¶ 8; Doc. 161–1 ¶ 8; see also Doc. 157, Ex. 29 at 6). To achieve a unified corporate identity, Integration, Too! also decided to rename each system entity to include the "UHS" title followed by a specific location or services delimiter, i.e., "UHS Delaware Valley Hospital." (Doc. 157, Ex. 35 at 3). United Health Services introduced "UHS" and the stylized logo as its "new name" in June 2010. (Id. Ex. 61 at 2).

UHS Delaware instituted this action with the filing of a complaint (Doc. 1) on March 16, 2012, subsequently filing an amended complaint (Doc. 9) on April 26, 2012, and a second amended complaint (Doc. 14–3) on June 6, 2012. UHS Delaware asserts the following claims: federal trademark infringement of the '433 mark (Count I) and the '663 mark (Count III) under 15 U.S.C. § 1114 ; federal unfair competition as to the '433 mark (Count II) and the '663 mark (Count IV) under 15 U.S.C. § 1125(a) and common law; state law infringement of the '663 mark under 54 PA. STAT. & CONS. STAT. ANN. § 1123 (Count V); and contributory infringement under federal and state statutory law and common law against United Health Services alone (Count VI). In the alternative, UHS Delaware seeks a declaration of the parties' respective rights pursuant to 28 U.S.C. § 2201 (Count VII).

Defendants filed individual answers and affirmative defenses (Docs. 114–20) on March 3, 2015. Among other defenses, each defendant asserts that it has senior rights to the "UHS" mark against UHS Delaware in New York state. (See id. ) United Health Services separately asserted counterclaims against UHS Delaware, seeking cancellation of the '433 and '663 marks. (Doc. 114). The court dismissed United Health Services' counterclaims with leave to amend by memorandum and order dated November 19, 2015. UHS of Delaware, Inc. , 2015 WL 7294454. United Health Services elected not to amend its counterclaims.

Following a period of discovery, the parties filed the instant cross-motions (Docs. 150–51) for summary judgment, together with supporting papers.⁴ The motions are fully briefed and ripe for disposition.

II. Standard of Review

Through summary adjudication, the court may dispose of those claims that do not present a "genuine dispute as to any material fact" and for which a jury trial would be an empty and unnecessary formality. FED. R. CIV. P. 56(a). The burden of proof tasks the non-moving party to come forth with "affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon , 331 F.Supp.2d 311, 315 (M.D. Pa. 2004) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250–57, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587–89, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Only if this threshold is met may the cause of action proceed. See Pappas , 331 F.Supp.2d at 315.

Courts are permitted to resolve cross-motions for summary judgment concurrently. See Lawrence v. City of Phila. , 527 F.3d 299, 310 (3d Cir. 2008) ; see also Johnson v. Fed. Express Corp. , 996 F.Supp.2d 302, 312 (M.D. Pa. 2014) ; 10A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2720 (3d ed. 2014). When doing so, the court is bound to view the evidence in the light most favorable to the...