Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_05-cv-00418/USCOURTS-azd-4_05-cv-00418-1/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 28:1331 Fed. Question: Trademark

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Unless otherwise stated, the facts are taken from Defendant's statement of facts. See

Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L.Ed.2d 202 (1986)

(evidence of the nonmoving party is to be believed).

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

SECUREMED CORPORATION, 

Plaintiff, 

vs.

STANDARD SECURITY LIFE 

INSURANCE COMPANY OF 

NEW YORK,

Defendant. 

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No. CV 05-418-TUC-CKJ

ORDER

Pending before the Court is Plaintiff's Motion for Summary Judgment. Defendant has filed

a Response and Plaintiff has filed a Reply. Oral argument was presented to the Court on February

2, 2006. 

I. Background1

Plaintiff SecureMed Corp. ("SecureMed") offers computer software for use with

medical office accounting, medical office appointment scheduling, billing, electronic health

insurance claim submission services, maintaining patient records, and computer consulting

services. SecureMed is not licensed to sell insurance policies. SecureMed registered the

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SecureMed asserts (in their Reply, but not in an affidavit or other form of evidence)

that its mark is SecureMed®.

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SECUREMED® mark with the United States Patent and Trademark Office ("USPTO").2

This mark is classified as "computer, science & legal."

Defendant Standard Security Life Insurance Co. of New York ("Standard") is an

insurance company that offers excess, life and health insurance policies. Standard is not in

the business of offering computer software design services or electronic health insurance

claim submission services. In early 2005, Standard adopted the Secure Med STM mark for

its short-term health medical insurance product.

The USPTO allowed SecureMed to register its mark even though there is a prior

registration for MEDSECURE® in the same classification.

On June 28, 2005, SecureMed filed a Complaint alleging trademark/service mark

infringement; unfair competition and trademark/service mark dilution under the Lanham Act,

and; unfair competition and trademark infringement under Arizona common law. 

On November 10, 2005, SecureMed filed its Motion for Summary Judgment. On

December 13, 2005, SecureMed filed a Notice that Standard did not file a timely Response

and reserved the right to move to strike as late and dilatory any Response. On December

15, 2005, Standard filed a Response. On December 23, 2005, SecureMed filed a Reply. The

Court notes that SecureMed has attached to its Reply apparent pages from web searches

apparently showing that searches result in "SecureMed" appearing for the Standard product.

However, SecureMed has not provided any affidavit to establish that is what these documents

are.

At the hearing on the Motion for Summary Judgment, counsel for SecureMed

submitted an exhibit. No foundation has been submitted with this exhibit. 

II. Summary Judgment Legal Standard

Summary judgment may be granted if the movant shows “there is no genuine issue

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as to any material fact and that the moving party is entitled to judgment as a matter of law.”

Rule 56(c), Federal Rules of Civil Procedure. A moving party must identify "those portions

of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of

material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91

L.Ed.2d 265 (1986), quoting Rule 56, Fed.R.Civ.P. Moreover, the Local Rules for this

district requires that the motion for summary judgment be accompanied by a separate

statement of "specific facts on which that party relies in support of the motion." Rule

56.1(a), L.R.Civ.P. Where the moving party bears the burden of proof at trial on the issues

raised in the summary judgment motion, its showing must be sufficient for the court to find

that no reasonable trier of fact could find other than for the moving party. Calderone v.

United States, 799 F.2d 254, 259 (6th Cir. 1986), quoting W. Schwarzer, Summary Judgment

Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 487-88

(1984). It is only when the moving party has met its initial burden that the burden shifts to

the responding party to produce evidence of specific facts which create a genuine issue for

trial. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 2511, 91

L.Ed.2d 202 (1986). The disputed facts must be material. Celotex Corp. v. Catrett, 477 U.S.

317, 322-23, 106 S. Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Therefore, the nonmoving party

must demonstrate a dispute “over facts that might affect the outcome of the suit under the

governing law” to preclude entry of summary judgment. Anderson, 477 U.S. at 248, 106 S.

Ct. at 2510.

The dispute over material facts must also be genuine. Id. A dispute about a material

fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the

nonmoving party.” Id. A party opposing a properly supported summary judgment motion

must set forth specific facts demonstrating a genuine issue for trial. Id. Mere allegation and

speculation are not sufficient to create a factual dispute for purposes of summary judgment.

Witherow v. Paff, 52 F.3d 264, 266 (9th Cir. 1995) (per curiam). “If the evidence is merely

colorable or is not significantly probative, summary judgment may be granted.” Anderson,

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477 U.S. at 249-50, 106 S. Ct. at 2511. However, the evidence of the nonmoving party is to

be believed and all justifiable inferences are to be drawn in his favor. Id. at 255.

Standard asserts, in its Response, that SecureMed's failure to file a separate statement

of facts and/or affidavits or evidence, requires that summary judgment be denied on this basis

alone. However, SecureMed asserts that it need not present evidence, but only point out the

lack of any genuine dispute as to material fact. 

Celotex recognized that a moving party would have to point to parts of the file to

demonstrate an absence of a genuine issue of material fact. Moreover, the failure to comply

with the local procedural requirement makes it difficult to determine that SecureMed has

made an adequate showing that no reasonable trier of fact could find for Standard. Celotex.

A sufficient showing cannot be made without the Court knowing that SecureMed actually

has evidence to support its claims. For example, in its Reply, SecureMed asserts that it is

undisputed that the parties are simultaneously using the Web as a marketing channel.

However, the Court has no evidence before it that SecureMed uses the Web as a marketing

channel. The Court cannot say that no reasonable trier of fact could find for Standard

without knowing that SecureMed has a witness or alternate evidence that, with adequate

foundation, can present this evidence to a trier of fact. Counsel's statement would be

insufficient to establish such an evidentiary fact before a jury; similarly, counsel's assertions

in pleadings are insufficient to establish such an evidentiary fact for purposes of summary

judgment.

III. Trademark Infringement

The Ninth Circuit Court of Appeals has stated that a "successful trademark

infringement claim under the Lanham Act requires a showing that the claimant holds a

protectable mark, and that the alleged infringer's imitating mark is similar enough to 'cause

confusion, or to cause mistake, or to deceive.'" Surfvivor Media, 406 F.3d 625, 630 (9th Cir.

2005), quoting KP Permanent Makeup, Inc. v. Lasting Impression I, Inc., 125 S.Ct. 542, 547,

160 L.Ed.2d 440 (2004). In this case, there is a material fact in dispute whether SecureMed

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holds a protectable mark. 

In determining whether the imitating mark is similar enough to cause confusion, the

factfinder must decide "whether a 'reasonably prudent consumer in the marketplace is likely

to be confused as to the origin of the good or service bearing one of the marks.'" Id., citing

Dreamwerks Production Group v. SKG Studio, 142 F.3d 1127, 1129 (9th Cir. 1998). A

likelihood of confusion requires a probability rather than simply a possibility. HMH

Publishing Co. v. Brincat, 504 F.2d 713, 717 (9th Cir. 1974). There are three primary routes

of proof for a plaintiff to establish a likelihood of confusion is probable: survey evidence,

evidence of actual confusion, and/or argument based on a clear inference arising from a

comparison of conflicting marks and the context of their use. 3 J.T. McCarthy, McCarthy

on Trademarks and Unfair Competition, § 23:63 (4th ed.). In this case, SecureMed has made

no showing of either survey evidence or actual confusion.

The Court, therefore, should compare the conflicting marks and the context of their

use. In determining the likelihood of confusion, a court is to consider (1) the strength of the

mark(s); (2) the relatedness of the goods; (3) the similarity of the marks; (4) the evidence of

actual confusion; (5) the marketing channels used; (6) the degree of consumer care; (7) the

defendant's intent in selecting the mark, and; (8) the likelihood of expansion. Surfvivor; see

also AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). The Ninth Circuit

has cautioned that summary judgment motions regarding the likelihood of confusion should

be granted sparingly, "as careful assessment of the pertinent factors that go into determining

likelihood of confusion usually requires a full record." Levi Strauss & Co. v. Blue Bell, Inc.,

778 F.2d 1352, 1356 n.5 (9th Cir. 1985). Indeed, "the question of likelihood of confusion

is routinely submitted for jury determination as a question of fact." Id.

A. Strength of the Mark

SecureMed asserts that the mark is unique. See Entrepreneur Media v. Smith, 279

F.3d 1135, 1141 (9th Cir. 2002) (stronger marks receive greater protection than weak ones).

However, Standard has presented evidence that the USPTO registered SecureMed® despite

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MedSecure® being already registered in the same classification. Moreover, Standard asserts

that "Secure" is used in 2690 trade mark and service mark records according to the USPTO

web site. See Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1179 (9th Cir. 1988)

(a weak mark is a mark that is a meaningful word in common usage or is merely a suggestive

or descriptive trademark). 

B. Relatedness of the Goods

The standard for deciding whether the parties' goods or services are related is whether

customers are likely to associate the two product lines. Dreamwerks, 142 F.3d at 1131,

Surfvivor, 406 F.3d at 631. SecureMed asserts that both SecureMed and Standard contract

with health care providers and that same customer base establishes a high degree of

relatedness. However, the products are similar only in the broadest sense: each product is

related to medical care providers. The actual products and their intended use reveal

significant differences in the two products.

C. Similarity of the Marks

SecureMed asserts that the marks are "a dead on, exact match." Motion, p. 5.

SecureMed further asserts that the added STM to Standard's mark refers to Short Term

Medical and that there is no dispute that Standard's health insurance is named SecureMed.

Standard asserts that if there was no likelihood of confusion between SecureMed® and

MedSecure® such that the USPTO granted the registration to SecureMed, there is no

likelihood of confusion between SecureMed® and Secure Med STM. Moreover, Standard

asserts that the SECUREMED® mark is not similar to the Secure Med STM mark. Standard

further asserts that the occasional use by agents that omit (1) the space between Secure and

Med or (2) the use of STM does not establish the marks are identical. SecureMed has

presented information, but not sworn to evidence, that its mark is actually SecureMed®

(without the capitalization) and web pages showing Standard's product being referred to as

SecureMed (without the space or use of STM).

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D. Evidence of Actual Confusion

No evidence of actual confusion has been presented. Actual confusion is considered

to be "the best evidence of likelihood of confusion." Amstar Corp. v. Domino's Pizza, Inc.,

615 F.2d 252, 263 (9th Cir. 1980). Indeed, "an absence of actual confusion, or a negligible

amount of it, between two products after a long period of coexistence on the market is highly

probative in showing that little likelihood of confusion exists." Aktiebolaget Electrolux v.

Armatron International, Inc., 999 F.2d 1, 3 (1st Cir. 1993).

E. Marketing Channels Used

SecureMed asserts that there is no dispute that the parties distribute their goods in the

same marketing channels. However, Standard asserts that SecureMed markets its products

to health care professionals, while Standard markets its products through licensed insurance

agents. Standard further asserts that it has presented evidence that it markets to individual

patients, small businesses, and registered agents and that SecureMed has not presented any

evidence to dispute this.

F. Degree of Consumer Care

SecureMed asserts that the "average health care consumer is reasonably prudent when

they seek medical services and therefore, would believe a company such as Plaintiff that

occupies a space in the health care industry could also offer health insurance or vice versa,

by the Defendant." Motion, pp. 6-7. Standard asserts, however, that an "unreasonably

imprudent consumer would be hard pressed to mistake Defendant's health insurance policies

for Plaintiff's Windows® based physician practice manage software integration products."

Response, p. 13.

G. Defendant's Intent

Standard asserts that it has submitted undisputed evidence that it adopted its Secure

Med STM mark without knowledge of SecureMed or its registered mark. SecureMed asserts

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that the entire world is on constructive notice of registered U.S. trademarks and, therefore,

Standard had constructive notice of the SecureMed mark. SecureMed asserts that Standard's

infringement, therefore, is with knowledge. See Tillamook Country Smoker, Inc. v.

Tillamook County Creamery Assoc., 333 F.Supp.2d 975, 980 n. 2 (D.Or. 2004) (registered

trademark provides constructive notice of registrant's ownership so as to defeat any claim of

good faith asserted by other users); Brookfield Communications v. West Coast Entertainment,

174 F.3d 1036, 1059 (9th Cir. 1999) (the presence of intent can constitute strong evidence

of confusion, but a lack of intent is largely irrelevant in determining if consumers likely will

be confused as to the source).

H. Likelihood of Expansion

SecureMed asserts that Standard's General Agents are often also in the health plan

administration business. However, SecureMed has not provided any evidence to support this

assertion. Standard asserts, and supports by affidavit, that it is unaware of any insurance

agent that also sells medical practice management software.

I. Likelihood of Confusion Summary

The Ninth Circuit has stated that, "[i]n the context of the Web, the three most

important Sleekcraft factors in evaluating a likelihood of confusion are (1) the similarity of

the marks, (2) the relatedness of the goods or services, and (3) the parties simultaneous use

of the Web as a marketing channel. When this "controlling troika" or internet trinity suggests

confusion is likely, the other facts must weigh strongly against a likelihood of confusion to

avoid the finding of infringement." Interstellar Starship Servies v. Epix, Inc., 304 F.3d 936,

942 (9th Cir. 2002). Here, the parties disagree regarding each of these factors. Although

these factors support a finding that there is a possibility of a likelihood of confusion, the

factors do not support a finding that there is a probability of a likelihood of confusion such

that summary judgment in favor of SecureMed would be appropriate. Summary judgment

of this claim will be denied.

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IV. Trademark Dilution

The Federal Trademark Dilution Act provides a remedy to "dilution of famous

marks." 15 U.S.C. § 1125. "Dilution" is defined as "the lessening of the capacity of a

famous mark to identify and distinguish goods or services." Id. In determining whether a

mark is distinctive and famous, a court may consider factors such as, but not limited to:

(1) the degree of inherent or acquired distinctiveness of the mark;

(2) the duration and extent of use of the mark in connection with the goods or

services with which the mark is used;

(3) the duration and extent of advertising and publicity of the mark;

(4) the geographical extent of the trading area in which the mark is used;

(5) the channels of trade for the goods or services with which the mark is used;

(6) the degree of recognition of the mark in the trading areas and channels of trade

used by the marks' owner and the person against whom the injunction is sought;

(7) the nature and extent of use of the same or similar marks by third parties; and

(8) whether the mark was registered under the Act of March 3, 1881, or the Act of

February 20, 1905, or on the principal register.

15 U.S.C. § 1125(c)(1). 

Standard asserts that, not only has SecureMed failed to present any evidence of

dilution, SecureMed has not carried its burden of establishing that SecureMed® is famous.

"Plaintiff is a tiny company with no physical footprint beyond its one office in Tucson and

small branch in Phoenix. It employees (sic) only twenty-eight (28) people. It has only used

its SECUREMED® mark in commerce since December of 1999. SECUREMED® is

inherently a weak, non-distinctive mark. Thousands of other marks employ the common,

descriptive words 'SECURE' and 'MED.'" Response, p. 15, citations omitted.

Relying on a Third Circuit case, SecureMed asserts that it need not show that its mark

is famous. The Third Circuit Court of Appeals has stated that "a mark not famous to the

general public is nevertheless entitled to protection from dilution where both the plaintiff and

defendant are operating in the same or related markets, so long as the plaintiff's mark

possesses a high degree of fame in its niche market." Times Mirror Magazines v. Las Vegas

Sports News, 212 F.3d 157, 164 (3rd Cir. 2000); see also Thane International, Inc. v. Trek

Bicycle Corp., 305 F.3d 894, 908 (9th Cir. 2002) ("[M]arks famous in only a limited

geographic area or a specialized market segment can be 'famous' for the purposes of the

federal anti-dilution statute." "Niche fame protection is, however, limited" to "when a mark

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is famous within a niche market and the alleged diluter uses the mark within that niche.").

SecureMed asserts that its co-sponsorship of the U.S. Surgeon General's Annual

Conferences in 2003 and 2004 (again, without any supporting evidence/foundation) show

that SecureMed's mark possesses a high degree of fame in its niche market. SecureMed

further asserts that the Court should consider:

1) the sheer number of infringing health insurance policies sold under the SecureMed

name, 2) the dozens of states where the policies have been sold, and 3) the

proliferation on the internet of Defendant's advertising and Defendant's General

Agent's advertising of the SecureMed health insurance policies. This infringement

has completely eclipsed Plaintiff's own paid advertising on Google® and Yahoo®.

These infringements, collectively by far meet the test for the 'dilution of the mark's

distinctive quality' which applies to all marks, including higher protected identical

marks, under Moseley.

Motion, p. 11, referring to Moseley v. Victoria Secret Catalog, 537 U.S. 418, 123 S.Ct. 1115

(2003). However, SecureMed has presented no evidence of these allegations. In Moseley,

the Court held that, where the marks are not identical, "the mere fact that consumers mentally

associate the junior user's mark with a famous mark is not sufficient to establish actionable

dilution." 537 U.S. at 419, 123 S.Ct. at 1117. SecureMed assumes the opposite circumstance

that identical marks require a determination that the mere mental association is sufficient to

establish actionable dilution. Although that may be a possible inference of Moseley, the

Supreme Court did not make such a holding.

Whether the statutory factors or the Third Circuit test is used, SecureMed has

presented no evidence from which the Court can conclude that there is no genuine issue as

to the material facts. Indeed, even if the Court relies on the Third Circuit test, SecureMed

has made no showing of dilution. Summary judgment on this claim will be denied.

V. State Common Law Claims

SecureMed asserts that the state common law claims are preempted by the federal

statutes and summary judgment in its favor on the federal claims requires summary judgment

in its favor on the state common law claims. Standard asserts the state common law mirrors

the federal law, but is not necessarily preempted by it. Standard asserts that, because

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As set forth in the October 25, 2005, Order.

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summary judgment on the federal claims is not appropriate, summary judgment should also

be denied as to the state common law claims. The Court having determined that denial of

summary judgment on the federal claims is appropriate, the Court will deny summary

judgment on the state claims.

Accordingly, IT IS ORDERED:

1. SecureMed's Motion for Summary Judgment [Doc. # 12] is DENIED;

2. A Scheduling Conference will be held in the above entitled action on March 16,

2006, at 10:00 a.m., with Elizabeth J. Jarecki, law clerk of the Honorable Cindy K.

Jorgenson. The conference will be held telephonically and SecureMed's counsel shall initiate

the scheduling conference by calling the law clerk at (520) 205-4550 with all parties on the

line, and;

3. Counsel shall file with the Court, on or before March 9, 2006, a Joint Report

reflecting the results of their meeting and outlining the discovery plan.3

DATED this 7th day of February, 2006.

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