Addressing the scope of injunctive relief awarded in a trademark infringement case, the US Court of Appeals for the Second Circuit affirmed a district court’s finding of a likelihood of confusion, but vacated, reversed and remanded the district court’s decision concerning the scope of its injunction, finding that the narrow injunction entered did not sufficiently protect the trademark owner. Guthrie Healthcare System v. ContextMedia, Inc., Case Nos. 14-3343-cv; 4-3728 (2d Cir., June 13, 2016) (Leval, J).
Guthrie Healthcare System is a health care provider that operates primarily in the rural counties along the New York and Pennsylvania border, a region known as the Twin Tiers. Guthrie recruits medical personnel from across the United States, and its charitable foundation conducts medical research and fundraising outside of the Twin Tiers region. Guthrie promotes its services and provides medical information over the internet. In 2001, Guthrie began offering and advertising its health care services under a logo consisting of stylized human figure colored in dark blue and orange (later registered with the US Patent and Trademark Office). In 2008, ContextMedia began selling to medical professionals media content to be played for patients in waiting rooms, under a logo nearly identical to Guthrie’s stylized human figure. ContextMedia also promoted its products over the internet.
Largely because ContextMedia’s logo was “jaw-droppingly similar” and because of the parties’ close proximity in commerce, the Second Circuit did not hesitate in affirming the district court’s determination that there was a likelihood of confusion and that thus ContextMedia was liable for trademark infringement. The Second Circuit, however, disagreed with the district court’s injunction, which only enjoined ContextMedia from using its logo in the Twin Tiers region and permitted ContextMedia to use its logo over the internet.
The Second Circuit found the injunction problematic for several reasons. First, the injunction permitted ContextMedia to use its logo within the Twin Tiers region over the internet. Second, the injunction permitted ContextMedia to use its logo in two New York counties outside of the Twin Tiers region where Guthrie had health care facilities. Third, and most importantly, the Court rejected the injunction’s narrow geographic scope. Guthrie used its logo outside of the Twin Tiers region to recruit medical personnel, to fundraise and to promote its services over the internet. The Court reasoned that this use “render[ed] Guthrie vulnerable to plausibly foreseeable confusions and harms” outside of the Twin Tiers region. As the Court recognized, the injunction also imposed a future harm on Guthrie: Guthrie could not expand its facilities beyond the Twin Tiers region without causing self-inflicted confusion with ContextMedia. The Court made clear that in reaching its decision, it did not hold that every senior user that proves likely confusion and infringement in its area of operation is automatically entitled to injunctions beyond that geographic area.
Ultimately, the Second Circuit affirmed the district court’s injunction to the extent it enjoined ContextMedia from using its logo, expanded the injunction to include the two counties where Guthrie had facilities, but vacated the injunction to the extent it permitted ContextMedia to use its logo outside the Twin Tiers region and remanded for further proceedings. It is now up to the district court to determine whether the injunction could be tailored to allow limited use by ContextMedia outside of the Twin Tiers region and on the internet, considering Guthrie’s interest in protection from confusion.