14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

1 UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2 3 August Term, 2015 4 (Argued: December 11, 2015 Decided: June 13, 2016) 5 Docket No. 14-3343-cv(L) 14-3728-cv(con) 6

------------------------ ------------------- ----------------X 7 8 GUTHRIE HEALTHCARE SYSTEM, 9 Plaintiff-Appellant-Cross-Appellee , 10 v. 11 12 CONTEXTMEDIA, INC., an Illinois Corpor ation, RISHI SHAH, an Individual, 13 Defendants-Appellees-Cross-Appellants , 14 15 DOES I through X, 16 Defendants

. 17

------------------------ ------------------- ----------------X 18 19 Before: JACOBS, LEVAL, CALABRESI, Circuit Judges : 20 21 Plaintiff, a provider of healthcare serv ices in New York and Pennsylvania, 22 and Defendant, a provider of digital health -related content nationwide, both appeal 23 from the judgment of the United States Distri ct Court for the Southern District of 24 New York (Forrest, J. ), which granted limited permanent injunctive relief on 25 Plaintiff’s claim of trademark infring ement. The complaint alleged that 26 Defendant’s trademarks were confusingly similar to Plaintiff’s trademark. The 27 injunction, following a bench trial, pr ohibited Defendant fro m using its marks 28 within Plaintiff’s geographic service area , but placed no restriction on Defendant’s 29 use of its marks on the Internet or outside Plaintiff’s service area. The Court of 30 Appeals concludes that Defendant’s trademar ks are infringing, but that the current 31 limitations placed on Defendant by the distri ct court in the injunction were based 32 on an incorrect standard and fail to give Plaintiff and the public adequate 33 protection from likely confusion. The findi ng of liability and the grant of injunctive 3414-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

2 relief are AFFIRMED. The scope of the in junction is expanded, and the case is 1 REMANDED for further proceedings. 2 3 ELLIOTT J. STEIN, Stevens & Lee, 4 Lawrenceville, NJ, (Bradley L. Mitchell, 5 Neil C. Schur, on the brief ), for Plaintiff6 Appellant-Cross-Appellee

. 7 8 EAMON P. JOYCE, Sidley Austin LLP, 9 New York, NY, (Joshua J. Fougere, on the 10 brief ), for Defendants-Appellees-Cross11 Appellants

. 12 Leval, Circuit Judge : 13 14 Plaintiff and Defendant 1 each appeal from the judgm ent of the United States 15 District Court for the Southern District of New York (Forrest, J. ), which, following 16 a bench trial, imposed on Defendant a limit ed injunction. Defendant contests the 17 finding of liability, and Plaintiff contests the limited scope of the injunction. The 18 complaint alleged trademark infringement in violation of the Lanham Act, 15 19 U.S.C. § 1114, unfair competition, and a number of related claims, on the basis 20 that Defendant’s trademark logo was confus ingly similar to Plaintiff’s trademark. 21 The court ruled in Plaintiff’s favor, find ing that a likelihood of confusion resulted 22
from Defendant’s use of trademarks simila r to Plaintiff’s. The court accordingly 23 granted permanent injunctive relief, pr ohibiting Defendant fro m using its marks 24

1 Where not otherwise indicate d, “Defendant” refers to CMI. Rishi Shah, who is CMI’s President, and also a Director, was also named as a Defendant. The district court found Shah not to be individually liable, and Plaintiff has not ch allenged this finding. His li ability is not at issue on this appeal.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

3 within Plaintiff’s geographic service area(“Guthrie Service Area”) (covering the 1 “Twin Tiers” region of Northern Pennsylva nia and Southern New York), but held 2 that Defendant may continue to use its marks everywhere outside the Guthrie 3 Service Area, as well as without restriction in Internet transmissions, on 4 Defendant’s websites a nd on social media. 5 We agree with the district court’s liability determination that there is a 6 likelihood of confusion between Plain tiff’s and Defendant’s trademarks. We 7 conclude, however, that, in restricting the scope of the injunction, the court 8 misapplied the law, a nd failed to adequately protect the interests of Plaintiff and 9 the public from likely confusion. We theref ore affirm the judgment in part, vacate 10 in part, expand the scope of the injunction, and remand for further consideration of 11 the scope of the injunction. 12 BACKGROUND 13
I. Plaintiff 14 Plaintiff Guthrie Healthcare System is a Pennsylvania non-profit corporation 15 composed of Guthrie Health care, the Guthrie Clinic, and the Guthrie Foundation. 16 Operating primarily in the Twin Tiers region of New York and Pennsylvania, 17 Plaintiff has 32 medical facilities, including three hospitals and 29 clinics, as well 18 as a number of specialized healthcare facilities such as a cardiology center and a 19 cancer center. Plaintiff also operates home healthcare services, hospice services, 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

4 and a durable medical equipment compa ny. It has a multi-disciplinary medical 1 group practice that includes more than 280 physicians and 130 mid-level providers 2 (physician assistants and nurse prac titioners) who practice in New York and 3 Pennsylvania. It also ope rates a pharmacy, and several medical supply stores, 4 which sell directly to the public. 5
Plaintiff recruits doctors and resident s nationwide. It provides educational 6 programs for its physicians, nurses, a nd medical technicians. Additionally, it 7 operates the Guthrie School of Nursing, wh ich recruits students nationwide. The 8 Guthrie Foundation conducts medical resear ch and fundraising beyond the Guthrie 9 Service Area, and disseminates medical info rmation over the Internet, as well as in 10 symposia and seminars. It requires thatsuch information meet evidence-based 11 medicine guidelines. 12 Plaintiff refuses to endorse third-part y products or services or to host 13 advertisements, in order to accommodate research funders’ sensitivities, preserve 14 its eligibility for clinical trials, and avoid the fact orappearance of conflict of 15 interest, bias, or partiality. 16 Plaintiff derives a substantial portio n of its patient-care revenue from 17 referrals from physicians and medical professionals. Around 20% of the 18 approximately $300 million annually paid to Plaintiff for specialized medical care 19 comes from referrals by other doctors an d medical professionals who are not 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

5 affiliated with Plaintiff. Plaintiff focuse s considerable marketing efforts on these 1 referring doctors and medical professionals, inviting them to classes, seminars, and 2 symposia, and assuring them that Guthrie w ill not seek to provide medical services 3 to the referred patients beyond those for which they were referred. 4
II. Defendant CMI 5 Defendant ContextMedia (“CMI”), found ed in 2006, has offices in Chicago 6 and New York City, and employs 42 people . Rishi Shah is CMI’s president and 7 one of its directors. Defendant serves approximately 2,600 physician practices, and 8 operates in all 50 states. 9 Defendant’s business is to deliver health-related content to physician 10 practices. Defendant installs digital screens in waiting areas, examination rooms, 11 and infusion rooms in physician practices wh ich play short videos and clips about 12 health and wellness to patients at those fac ilities. In the vast majority of instances, 13 Defendant’s revenue comes from advertising displayed with its content; a small 14 number of physicians who subscribe to its service pay a fee in order to avoid 15 advertisements. The advertisers whose ads appeartogether with Defendant’s 16 content, its “sponsors,” are mostly larg e pharmaceutical companies; their ads are 17 displayed in between the segments of ed ucational health-rela ted programming. 18 The material Defendant displays on its screens is primarily educational 19 digital content related to health and welln ess, such as short segments on nutrition 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

6 and exercise tips. Much of this material is created by organizations such as the 1 American Heart Association, the American Dietetic Association, the Academy of 2 Nutrition and Dietetics, the Juvenile Di abetes Research Foundation, Health Day 3 TV, and D Life, among others, from which Defendant obtains licenses to broadcast 4 their materials. 5 Medical offices that wish to displa y CMI’s programming in their practices 6 enroll as Defendant’s “members.” Defendant then installs flat panel display units, 7 media players, and necessary hardware in their waiting rooms. Defendant recruits 8 new members by placing cold calls to physician practices. 9 Defendant has two webs ites: www.contextmediah ealth.com, which serves 10 primarily members, and www.contextmediain c.com, which is directed primarily to 11 potential sponsors, prospec tive employees, and media. 12 The CMI screen is divided into three sections. A sidebar on the left side of 13 the screen displays CMI’s marks. There is also a main content window, and a news 14 ticker at the bottom of the screen. The main content window also occasionally 15 displays the CMI marks. 16
III. The Trademarks 17

a. Plaintiff’s Trademark 18 Plaintiff launched the Guthrie Trad emark and a new brand identity in 19 September 2001. The mark was developed by Monigle Associates, a consulting 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

7 firm that works in corporate branding an d identity. Soon after, every aspect of 1 Plaintiff’s business bore the Guthrie Tradem ark. Plaintiff applied to register the 2 Guthrie Trademark with the United States Patent and Trademark Office (“PTO”) in 3 2006, and the mark became a Register ed Trademark on January 22, 2008. 4 Plaintiff’s mark is pictured below: 5

6 The Guthrie Trademark has two elem ents—a logo on the left and the 7 Guthrie name, which appears in bold, capital letters to the right of the logo. This 8 litigation concerns primarily the logo. Th e Guthrie logo consists of a shield 9 containing a stylized human figure co mposed of crescent moon segments, topped 10 by a detached oval head. The upper part of the body—outstretched arms and 11 torso—is represented by a single crescent moon shape with its two points curving 12 upward, each representing an arm, termina ting at points at the outer edges of the 13 background shield. The portion of the body below that crescent is represented by 14 two partial vertical crescents, joined at the top where they meet the upper body 15 crescent and combine to represent the lower part of the torso, and separated at the 16 bottom, so that each repres ents a leg. The points of th e crescents curve toward the 17 viewer’s left, and each lower tip ends atthe border of the background shield. The 1814-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

8 center point between the tips of the figure’s le gs is substantially to the right of the 1 vertical center line of the background shield , while the head is to the left of the 2 vertical centerline of the shield, so that the figure tilts toward the viewer’s left. The 3 points of the crescent moons (d epicting the arms and the legs of the figure) divide 4 the shield into four segments. The huma n figure is white. The segments of the 5 shield outside the outline of the human figu re are colored – two segments are dark 6 blue, one is yellow, and one is orange. Ther e is a small, rectangular cutaway at the 7 top right corner of the shield. The word “Guthrie” is always presented in large, 8 bold, capital letters to the right of the logo. 9 The Guthrie Trademark is prominently featured on both the primary Guthrie 10 website (www.guthrie.org) and the websit e focused on personnel recruitment and 11
business development (www.ichoseguthrie.org). The Trademark appears on 12 Guthrie facilities, personnel badges, busin ess cards, stationery, brochures, reports, 13 publications, billboards, buses, and in pr int and television advertisements. 14 Beginning in 2001, Plaintiff ran tele vision advertising that prominently 15 displayed the Guthrie Trademark in New Yo rk and Pennsylvania. Plaintiff has also 16 partnered with television stations to produ ce health-related features that have been 17 broadcast to wide audiences , also featuring the Guthri e Trademark. From July 1, 18 2008 to June 30, 2013, Plaintiff spent $7.25 million promoting the Guthrie Mark 19 and brand. 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

9 Starting in 2010, Plaintiff began a new program called digital signage, 1 designed to “push” health-rela ted content out to video sc reens at Guthrie facilities. 2 Only two such screens are now in pl ace, but according to Joseph Scopelliti, the 3 President and CEO of Guthrie, “many more” are planned. The project was 4 included in the 2013 and 2014 Fiscal Year budgets. However, the two screens that 5 are in place have been there since 2011 (or 2010), and no mo re have gone up. 6 There has been no development or implem entation of content for the screens. 7
b. Defendant’s Trademarks 8 In late 2007, Defendant hired Ant hony Bonilla, a graphic designer, to 9 develop a logo. Defendant be gan using Bonilla’s designs as its logos in March 10
2008. 11 Defendant’s eight marks at issue in th is litigation contain the same graphic 12 element, although the colors of the back ground elements differ. Defendant’s Mark 13 1 is pictured below: 14

15 Like the Guthrie logo, Defendant’s lo go consists of a shield containing a 16 stylized human figure composed of cres cent moon segments, topped by a detached 1714-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

10 oval head. The upper part of the body— outstretched arms and torso—is 1 represented by a single crescent moon shap e with its two points curving upward, 2 each representing an arm, terminating at points at the outer edges of the 3 background shield. The portion of the body below that crescent is represented by 4 two partial vertical crescents, joined at the top where they meet the upper body 5 crescent and combine to represent the lower part of the torso, and separated at the 6 bottom so that each represen ts a leg. Both of the point s of these crescents curve 7 toward the viewer’s left, and each lower tip ends at the border of the background 8 shield. The center point between the tips of the figure’s legs is to the right of the 9 vertical center line of the background shield , while the head is to the left of the 10 vertical centerline of the shield, so that the figure tilts toward the viewer’s left. The 11 points of the crescent moons (d epicting the arms and the legs of the figure) divide 12 the shield into four segments. 13 As with Plaintiff’s logo, the human figure in Defendant’s logo is always 14 white, and the four background shield sections are colored. Defendant uses its logo 15 with text in bold, usually capitalized letters, laid out to the right of the logo. It uses 16 the logo in eight different marks, the diffe rences lying primarily in the different 17 text and in the varying colors of the background shield. Three of Defendant’s 18 marks have a color scheme similar to Guth rie’s—“Mark 1” (the logo with the text 19 “Diabetes Health Network”), “Mark 2,” (the logo with the text “ContextMedia”), 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

11 and “Mark 8” (the logo with the text “ContextMedia Health”)—all have a purple 1 segment, two yellow/gold segm ents, and a dark blue segm ent. Other CMI marks at 2 issue have background color schemes that differ from Guthrie’s. Three of the CMI 3 marks are in black and white. Defe ndant sometimes uses its name, 4 “ContextMedia,” alongside the logo. In ot her marks, the text alongside the logo 5
describes the health-related s ubject matter of the partic ular videos being shown. 6 Occasionally Defendant’s graphic appears on its own without accompanying text. 7 The PTO originally refused to registerthree of Defendant’s marks because 8 of likelihood of confusion with Plainti ff’s mark. Defendant responded to the PTO 9 and made many of the same arguments it made in this case. The PTO ultimately 10 approved the marks for registration, and registered Defe ndant’s first seven marks 11 between 2009 and 2013. 12 On August 16, 2013, ten months after this litigation commenced, Defendant 13 filed an Intent to Use Trademark Applica tion to register anot her mark (“CMI Mark 14 8”). 15
Defendant has rebranded its elf as ContextMedia Hea lth, and intends to use 16 Mark 8 as its primary mark going forwar d. The condition-specific marks continue 17 to be used in some comm unications with sponsors. 18
IV. Events Triggering this Suit 19 Plaintiff had never heard of Defe ndant prior to December 2011, when 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

12 Plaintiff received a holiday card from Defenda nt which displayed its Mark 1. Mary 1 Ann Dougherty, Plaintiff’s director of st rategic planning and marketing, saw that 2 the “[t]he graphic elements used in the [C MI] trademarks [were] very, very similar 3 to that of the Guthrie trad emark.” On January 3, 2012, she contacted Defendant to 4 advise it that it was “duplicating” Plain tiff’s logo and requested an explanation. 5 She followed up with a letter on February 1, 2012, “demanding” that Defendant 6 cease all use of Plaintiff’s image. She never received a re ply from Defendant. 7
V. Proceedings Below 8 Plaintiff filed this action on Oct ober 26, 2012. The amended complaint 9 asserts eight counts of trademark infri ngement under 15 U.S.C. § 1114; a claim of 10 unfair competition under 15 U.S.C. § 1125(a ); a claim of false designation of 11 origin under 15 U.S.C. § 1125(a); common -law unfair competition; a claim of 12 trademark dilution under 15 U.S.C. § 1125(c); and unjust enrichment. 13 Defendants moved for summary judgmen t on all counts, and the district 14 court granted it in part. The court found that there was no triable issue of material 15 fact as to actual consumer confusion, ba d faith, or willful deception for Marks 1-7; 16 as a result, monetary relie f was not available under the Lanham Act. The court also 17 granted summary judgment to Defendant s on the state-law unfair competition 18 claim, which requires bad faith as an el ement. Plaintiff abandoned its claim for 19 dilution prior to the grant of summary j udgment. Before trial, the court granted 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

13 Defendant’s motion for reconsideration and dismissed Plaintiff’s unjust enrichment 1 claim, and also severed the eighth count of federal trademark infringement, which 2 involved Defendant’s Mark 8, the mark that was registered after the suit began. 3
The district court held a bench tria l on February 5, 2014 regarding the 4 remaining claims—seven counts of fede ral trademark infringement, a claim of 5 unfair competition under the Lanham Act, and a claim of false designation of 6 origin under the Lanham Act. 7 The court found that there was a “lik elihood of confusion” as between 8
Plaintiff’s and Defendant’s trademarks in the Guthrie Service Area. However, the 9 court ruled that there was no such likelih ood of confusion outside of the Guthrie 10 Service Area. 2 11 The court enjoined Defendant from us ing its marks within the Guthrie 12 Service Area, but expressly authorized De fendant to “continue to use its marks on 13 its websites, in social media, and in othe r online content that is made available to 14 the public at large through the Internet.” The court also denied an injunction for 15 local use by Defendant in two New Yorkcounties (Tompkins and Schuyler) where 16 Plaintiff maintains patient treatment facilities. 17

18

2 The court also found for Plaintiff on the unfai r competition and false designation claims, on the grounds that the standards for those claims were the same as the standard for trademark infringement. The court found that Defenda nt Shah was not individually liable.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

14 Plaintiff appeals from the limited scope of the injunction, and Defendant 1 appeals from the finding of infringement. 2 DISCUSSION 3 A. Trademark Infringement 4 A claim of trademark infringement unde r the Lanham Act is analyzed under 5 a two-prong test. Gruner + Jahr USA Publ ’g v. Meredith Corp. , 991 F.2d 1072, 6 1075 (2d Cir. 1993); see also Virgin Enters. Ltd. v. Nawab , 335 F.3d 141, 146 (2d 7 Cir. 2003). The first prong looks to whethe r the senior user’s mark is entitled to 8 protection; the second to whether the junior user’s use of its mark is likely to cause 9 consumers confusion as to the origin or sponsorship of the junior user’s goods. Id. 10 As to the first prong, a certificate of registration with the PTO is “prima 11 facie evidence that the mark is registered and valid ( i.e. , protectable), that the 12 registrant owns the mark, and that the regi strant has the exclusive right to use the 13 mark in commerce.” Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc. , 192 14 F.3d 337, 345 (2d Cir. 1999). 15 The likelihood-of-confusion prong turn s on whether ordinary consumers 16 “are likely to be misled or confused as to the source of the product in question 17 because of the entrance in the marketplace of [the junior user’s] mark.” Playtex 18 Prods., Inc. v. Georgia-Pacific Corp. , 390 F.3d 158, 161 (2d Cir. 2004), 19 superseded by statute on other grounds as recognized in Starbucks Corp. v. 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

15 Wolfe’s Borough Coffee, Inc. , 588 F.3d 97, 108 (2d Cir. 2009) (quoting Cadbury 1 Beverages v. Cott Corp. , 73 F.3d 474, 477-78 (2d Cir. 1996)). We have held that 2
satisfaction of the likelihood-of-confusion standard requires a “probability of 3 confusion, not a mere possibility.” Id. (quoting Nora Beverages, Inc. v. Perrier 4 Grp. of Am., Inc. , 269 F.3d 114, 121 (2d Cir. 2001)). 5 In addressing likelihood of confusi on and the appropriate remedy, we 6 generally examine the non-exclusive list 3 of eight factors suggested by Judge 7 Friendly in his landmark opinion in Polaroid Corp

. v. Polarad Electronics Corp. , 8 287 F.2d 492, 495 (2d Cir. 1961): the strengt h of the senior user’s mark; the 9 similarity of the parties’ marks; the proxi mity of the parties’ areas of commerce; 10 the likelihood that the senior user will br idge the gap separating their areas of 11 activity; the existence of actual consumer confusion; whether the junior user acted 12 in bad faith or was otherwise reprehensibl e in adopting the mark; the quality of the 13 junior user’s product; and the sophistica tion of the relevant consumer group. The 14 pertinence of individual factors varies with the facts of the particular case. Courts 15 should not treat any one factor as dispos itive, nor apply a “mechanical process” 16

3 In Chandon Champagne Corp. v. San Marino Wine Corp. , 335 F.2d 531 (2d Cir. 1964), decided three years later, Judge Friendly added three more factors, to be considered when they are pertinent to the facts. These were “ the rather sterile nature of plaintiffs' three-year priority due to their exceedingly limited sales in this coun try, their long delay in asserting their claim, and the serious harm an injunction would cause the defendant as against the trifling benefit to the plaintiffs.” Id. at 536. These do not appear pertinent to our appeal.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

16 awarding judgment to “the party with the greatest number of factors weighing in its 1 favor.” Nabisco, Inc

. v. Warner-Lambert Co. , 220 F.3d 43, 46 (2d Cir. 2000). 2 We generally review determinations as to individual Polaroid factors for 3 clear error, at least to the extent they involve factual determinations, and treat the 4 trial court’s balancing of the factors as a question of law to be reviewed de novo

. 5 Starbucks Corp. v. Wolfe ’s Borough Coffee, Inc. , 588 F.3d 97, 105 (2d Cir. 2009). 6 However, we have recognized that the assessment of some of the Polaroid factors 7 may involve issues of law. This is particul arly so for determinations as to whether 8 the senior user’s mark is sufficiently fancif ul or arbitrary in relation to the senior 9 user’s area of commerce to be deemed a strong mark, or in contrast, merely 10
identifies or describes the senior user’s commerce so as to be unenforceable or 11 weak, as explained by Judge Friendly in Abercrombie and Fitch Co. v. Hunting 12 World, Inc. , 537 F.2d 4, 9 (2d Cir. 1976). See Patsy’s Brand, Inc. v. I.O.B. Realty, 13
Inc. , 317 F.3d 209, 216 (2d Cir. 2003) (“[T]her e is a considerable component of 14 law in the determination whether a mark has the degree of strength necessary to 15 weigh in favor of the party claiming infringement.”). 16 We review the scope of a district’s c ourt’s injunction for abuse of discretion, 17 which can be found if the district court “r elied upon a clearly e rroneous finding of 18 fact or incorrectly applied the law.” Catanzano by Catanzano v. Wing , 103 F.3d 19 223, 228 (2d Cir. 1996). 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

17 B. Applying the Polaroid Factors 1 It is undisputed that Plaintiff’s mark is registered and entitled to protection. 2 The principal questions in dispute are wh ether Defendant’s use of its marks is 3 likely to cause confusion in the marketpla ce, and, if so, the appropriate scope of 4 relief. 5 In this case, as is often true, the fact ors that have the greatest pertinence are 6 the degree of similarity between the two marks, and the proximity of Defendant’s 7 area of commerce to Plaintiff’s. The strength of Plaintiff’s mark and the 8 sophistication of the buyers also play significant roles. Because of their 9 predominance in this case, we disc uss these four factors first. 10

a. Similarity of the Marks 11 The logos employed in Plaintiff’s and Defendant’s marks are jaw-droppingly 12 similar—nearly identical not only in concep tion but also, as described above, in the 13 great majority of the fine details of execution. Plaintiff submitted an exhibit 14 illustrating Defendant’s logo as an overlay of Plaintiff’s, which shows that, while 15 Defendant’s logo does not exactly coincide with Plaintiff’s, as they would in a 16 tracing, they are very nearly identical in most instances. The differences are small 17 and lie primarily in minor, relatively insigni ficant details, rather than in the overall 18 visual impression the marks create upon ca sual inspection. One who studies them 19 side-by-side would observe the small differences. Howeve r, a person having some 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

18 familiarity with Plaintiff’s mark, w ho then casually sees Defendant’s, as 1 consumers do, without meticulously compar ing them side-by-side, would be highly 2 likely to believe she is seeing the familiar logo. See W.W.W. Pharmaceutical Co., 3
Inc. , 984 F.2d at 573 (pointing to the need to look to the “general impression 4 created by the marks, keeping in mind all factors which the buying public will 5 likely perceive and remember”). This degree of similarity, furthermore, is in the 6 context of an unusual and distinctive desi gn. The more unusual and distinctive the 7 design of a trademark logo, the greater th e likelihood that such an astonishing 8 degree of similarity will evoke an assumption that the se nior and junior user are 9 affiliated. 10 We recognize that one must assess like lihood of confusion “by reference to 11 the marks in their entirety and not merely focusing on similar elements in marks 12 which, taken as a whole, ar e not confusingly similar.” Brennan’s, Inc. v. Brennan’s 13 Restaurant, LLC , 360 F.3d 125, 133 (2d Cir. 2004)

. That does not alter our 14 conclusion. As noted above, the text in De fendant’s marks is laid out in a manner 15 visually very similar to Plaintiff’s mark. While Plaintiff’s mark always sets forth 16 Plaintiff’s name, “Guthrie,” and Defendant’s use of the logo is often accompanied 17 by references to various medical concerns such as “heart health ,” “dermatology,” 18 or “cardiology,” there is no reason w hy these differences would suggest 19 unrelatedness, especially as Plaintiff’s medical practice concer ns itself with the 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

19 very issues identified in the text of most of Defendant’s marks. 1 Nor is likelihood of confusion dispelled by the fact that Defendant often uses 2 its name, ContextMedia, alongside the logo. Given the importance of the 3 distinctive logo in both cases to the overa ll design, coupled with the similarity 4 between the two companies’ logos, the a ppearance of Defendant’s company name 5 alongside what appears to be Plaintiff’s logo would be likely to suggest to one 6 familiar with the Guthrie trademark at le ast a mutually consenting or affiliated 7 business relationship between ContextMedia and Guthrie. 8 In short, given the degree of similar ity between Plaintiff’s and Defendant’s 9 marks, together with the distinctiven ess of the logos and the proximity of 10
Plaintiff’s and Defendant’s areas of comme rce, which we discuss below, it would 11 be surprising if ordinary viewers familiar with Plaintiff’s mark did not draw the 12 mistaken inference, on seeing Defendant’s mark and message, that the message 13 they were seeing came from Plaintiff or its affiliate. Confusion resulting from the 14 similarity is not only likely, it is highly probable; indeed in our view it is virtually 15 unavoidable. 16 The district court found a “high degree of similarity” between Plaintiff’s and 17 Defendant’s marks. Defendant contests that findi ng, arguing that the constant 18 presence of the word “Guthrie” alongside Plaintiff’s mark makes the two easily 19 distinguishable. For reasons explained above , we reject Defendant’s argument and 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

20 agree completely with the district cour t that this factor powerfully favors the 1 Plaintiff. 2
b. Proximity of Areas of Commerce 3 4 The proximity factor can apply to both the subject matter of the commerce in 5 which the two parties engage and the geographic areas in which they operate. Its 6 pertinence depends on the logical proposition that the public is less likely to draw 7 an inference of relatedne ss from similar marks when the marks’ users are in 8 dissimilar areas of commerce, or, depe nding on circumstances, are involved in 9 localized commerce in geographic areas widely distant from one another. A 10 consumer who is familiar with the trad emark of her oft-frequented coffee shop, 11 who then observes that a designer/distribut er of antivirus computer software does 12 business under a trademark logo that is ve ry similar to the coffee shop’s trademark, 13 is unlikely to believe that the two enterpri ses are related. On th e other hand, if the 14 patron of a Grand Concourse coffee shop sees a second coff ee shop in a nearby 15 neighborhood using what appears to be the same trademark, she is far more likely 16 to believe that the two coff ee shops are affiliated than if the second coffee shop is 17 in San Antonio, Texas. The more likely it appears that an enterprise in one party’s 18 area of commerce might also engage in the other party’s area of commerce, the 19 greater the likelihood that the public will in fer an affiliation from the similarity of 20 the marks. 2114-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

21 Plaintiff and Defendant operate in clos ely related fields. Plaintiff provides 1 healthcare services. It operates numerous hospitals, clinics, and other healthcare 2 facilities in a service area spanning two st ates. Defendant distributes health- and 3
healthcare-related content on screens it places in doctor’s offices. Over the 4 Internet, Defendant recruits doctors in whose offices it would install its display 5 screens, as well as sponsor s (primarily pharmaceutical companies) and prospective 6 employees, and it communicates with the me dia. In all of these communications, 7 Defendant uses its marks that are so ex traordinarily similar to Plaintiff’s. 8 Given the clear subject-matter relati onship of Defendant’s communications 9 to Plaintiff’s commerce, ther e is every reason to believe that persons familiar with 10 Plaintiff’s trademark, who view Defendant’s trademark, are likely to assume that 11
Defendant and Plaintiff are related en tities. Defendant’s various trademarks, 12 alongside its Guthrie-like logo, reference, for example, a “rheumatoid health 13 network,” a “heart health network,” “a car diology health network,” a “dermatology 14 health network,” and a “skin care health ne twork.” Plaintiff’s hospitals, clinics and 15 other healthcare facilities, no doubt, also concern themselves with these same 16 medical concerns. If a user familiar with Plaintiff’s mark knows that Plaintiff 17 operates clinics and hospitals, and then sees Defendant’s “Diabetes Health 18 Network” logo, she is likely to a ssume that she is reading about Plaintiff’s diabetes 19 health network. At the same time, persons familiar with Defendant’s transmissions 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

22 who then encounter Plaintiff’s logo also have every reason to assume relatedness. 1 Proximity in a geographic sense also supports a likelihood of confusion. In 2 the first place, Defendant’s communications reach into the Gu thrie Service Area. 3 Defendant places screens in doctor’s of fices in the areas of New York and 4 Pennsylvania where Plaintiff’s care facilities are located; its Internet 5 communications reach medical profession als operating in Plaintiff’s area of 6 operations; furthermore, its communi cations seeking sponsorship from 7 pharmaceutical companies that operate nationwide are affecting business entities 8 that operate in Plaintiff’s area of commerce. Those who see Defendant’s 9 trademark-identified communications in Pl aintiff’s geographic area have every 10 reason to believe they are affiliated with Plaintiff. The fact that Defendant’s 11 communications focus on such subjects as cardiology, rheumatology, diabetes, and 12 dermatology, increases the likelihood that pe rsons familiar with Plaintiff’s health 13 care network would infer affiliation from the similarity of the marks. 14 Furthermore, Plaintiff’s activities are not confined to the Guthrie Service 15 Area where most of its care facilities are located. Plainti ff recruits doctors, nurses, 16 and other personnel throughout the country ; it receives referrals from doctors who 17 may be anywhere in the United States; an d it distributes medical content through 18 the Internet. While the number of instan ces of confusion occurring outside the 19 Guthrie Service Area is likely to be smaller than within, reasonable persons outside 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

23 that area will encounter the two mark s in connection with medicine-related 1 commerce and will predictably mist akenly assume a relationship. 2 The district court found that the proximity factor favored Plaintiff as to 3 Defendant’s activity within Plaintiff’s area of commerce. Defendant contests this 4 finding. In our view there can be little doubt the district court was correct. 5

c. Strength of Plaintiff’s Mark 6 The Polaroid factor that focuses on the “strengt h” of the senior user’s mark 7 is significant for two separate reasons, one having to do with the likelihood of 8 confusion in the marketplace, the othe r with broad public policy concerns 9 underlying the law of trademark. The term“strength” refers primarily to four 10 categories of gradually increasing prot ection accorded to trademarks, as 11 illuminated in Judge Friendly’s opinion in Abercrombie and Fitch Co , 537 F.2d at 12 9-11. 4 13
At the bottom of the ladder is the generic mark, which is “understood as 14 referring[] to the genus of which the particular product is a species.” Id. , at 9. A 15 generic mark cannot become a valid trademark, possessing the right to exclude 16 others from its use. Id . The reason for this is obvious. One purveyor’s use in 17

4 The “strength” of a mark can refer also to strength acquired in the marketplace, which is roughly the equivalent of fame. The theory is that a mark similar to a famous mark is more likely to cause confusion, or at least more likely to cause a more widespread confusion, than a mark similar to a relatively unknown one. The concept of acquired strength has no application in this case, as Guthrie does not claim that its mark is famous.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

24 commerce of a trademark consisting of the word that identifies what is sold under 1 that mark “cannot [reasonably] deprive co mpeting manufacturers of the product of 2 the right to call an article by its name.” Id. See also J. Kohnstam, Ltd. v. Louis 3
Marx & Co. , 280 F.2d 437, 440 (C.C.P.A. 1960). 4 On the next rung up the ladder of strength is descriptive marks. Under the 5 common law, descriptive marks were treated identically w ith generic marks, and so 6 were also unprotectable for the same reason. Id . However, no doubt out of concern 7 for businesses that invested time and money in building a brand identity under 8 descriptive marks, the Lanham Act introduced an exception to this disqualification 9 for descriptive marks. If a descriptive mark had acquired a “secondary meaning,” 10 in that it had “become distinctive of the applicant’s goods in commerce,” the 11 previously unregistrable mark be came registrable and protectable. 12 15 U.S.C. § 1052(f). Descriptiv e marks, being at the bottom of the ladder of 13 enforceable marks, command weak protection. 14 The next rung up the ladder is for suggestive marks—those that 15 communicate something about the product to which they relate, but by suggestion 16 rather than description. These are accord ed somewhat stronger protection. Finally, 17 the strongest protection goes to marks that are arbitrary or fanciful —marks that 18 have no logical relationship to the product or service for which they were used. 19 Abercrombie & Fitch Co. , 537 F.2d at 10-11. 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

25 The first pertinence of the strength of a mark has to do with likelihood of 1 public confusion. The more unusual and di stinctive a particul ar mark, the more 2 likely the consumer will assume, upon seei ng it essentially replicated, that the 3 newly observed user is the same as, or aff iliated with, the originally observed user. 4 Considered in terms of inherent strength, different aspects of Plaintiff’s mark 5 pull in different directions. Defendant emphasizes that Plaintiff’s mark shows a 6 human figure in an energetic, athletic pose that is strongly suggestive of good 7 health, which is the subject ma tter of Plaintiff’s commerce. 5 The argument is not 8 without force. If Plaintiff were seeki ng the exclusive right among entities operating 9 in the area of health concerns to use a logo representing a human being in an 10 energetic, athletic or dancelike pose, its claim would be weak. 11 However, while the subject matter of Plaintiff’s logo somewhat weakens its 12 claim, the manner of execution of the logo tends to strengthen it. This is not a 13 conventional, ordinary representation of the human figure. The design is executed 14 with considerable fanciful and arbitrar y features—in particular the abstracted 15 rendition of the human figure through join ed crescent moon shap es and a separated 16 oval. These abstract, geomet ric design features render Pl aintiff’s logo considerably 17 more distinctive. 18

5 Plaintiff’s own testimony reveals that th e logo was intended to be suggestive—to portray that Plaintiff was putting the patient at th e center of all things that it did. The shield was meant to suggest heritage, strength, and stability.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

26 Defendant also contends that the ma nner in which Plaintiff’s logo imposes 1 geometric, abstract shapes on th e human body is commonplace and lacks 2 originality. Defendant sought to illustrate the point by showing similar designs that 3 are used in commerce. While it is true th at the reduction of the human figure into 4 abstract shapes is not unusual, none of the examples offered by Defendant looks 5 significantly like Plaintiff’s distinctive logo. 6 While Plaintiff’s mark, given its hea lth-related subject, may not belong in 7 the highest category of inherent mark stre ngth, nor does it belong in the weakest. 8 Its design features are sufficiently fanciful , arbitrary, and distinctive to render it a 9 reasonably strong mark. Furthermore, the distinctiveness of Plaintiff’s design 10 strongly supports Plaintiff on the issue of ultimate concern to our inquiry–the 11
likelihood that Defendant’s use of so si milar a mark will cause confusion in the 12 marketplace. 13 We do not imply that Plaintiff would necessarily prevail if it sought the 14 exclusive right in the health field to employ a logo that represents the human body 15 in terms of a smoothly oval head combined with crescent shapes. Nor do we imply 16 that Defendant must be compelled to abandon completely its depiction of the 17 human body in oval and crescent shapes. Thes e are not the issues we confront. The 18 issue is whether Defendant infringes Plai ntiff’s trademark rights by using marks 19 that are nearly identi cal to Plaintiff’s. 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

27 The ascending ladder of mark strength, which depends on the extent to 1 which a mark does not claim exclusive entitlement over terms that serve in 2 ordinary language to identify or describe the covered areas of commerce, also 3 reflects the public policy underlying the trad emark law. When applied to arbitrary 4 and fanciful trademarks that do not seek to monopolize ordinary descriptive 5 language, the trademark law powerfully serv es the interests of sellers, buyers, and 6 the general public alike. A seller can cap italize on a well-earn ed reputation for 7 selling a product of dependable high quality , and consumers can distinguish one 8
seller’s mark as a reliable indicator of quality from the mark of a seller whose 9 performance has been disappointing. One se ller’s monopolization of a particular 10 term does not deprive competitors of a nything of value because the number of 11 arbitrary or fanciful marks available fo r use is infinite, and one merchant’s 12 exclusive reservation of the mark does not deprive others of the opportunity to use 13 terms that apply adjectivally to their particular commerce. No one acquires a 14 monopoly over the use of terms that ought to be generally available in the market 15 of an area of commerce, as is the case to the extent one merchant acquires the 16 exclusive right to the use of descriptive, or even suggestive, language. Thus, when 17 sellers use arbitrary or fanciful mark s, the trademark law produces a win-win 18 formula, which benefits all participants in the marketplace an d also serves public 19 policy, by enabling the public to know whatpurveyor is the source of products and 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

28 services offered on the marketplace. We conclude that Plaintiff's design has a 1 sufficient degree of originality and dis tinctiveness to increase the likelihood of 2 confusion and to avoid the circumstance in which grant of relief would unfairly 3 reserve to one party adjectiv al terms to which all entities working in the area of 4 commerce ought to have access. 5
d. Buyer Sophistication 6 The sophistication factor can have a significant bearing on likelihood of 7 confusion. Where the persons with whoma senior user hopes to do business or 8 with whom a senior user hopes to main tain a favorable reputation have a high 9 degree of familiarity and sophistication c oncerning the market in which the senior 10 user operates, it may be obviou s to them, notwithstanding similarity of trademarks, 11 that a junior user’s activities have no re lationship to those of the senior user. 12 Conversely, to the extent that a senior us er’s potential customers, and other entities 13 with which it hopes to maintain its re putation, do not have a sophisticated 14 knowledge of the overall market, the like lihood is higher that similarity of 15 trademarks may lead them to believe thata junior user’s activities are affiliated 16 with those of the senior user. 17 The buyer sophistication factor favors Plaintiff. As the district court 18 recognized, even to the extent that Plain tiff’s prospective customers exercise care 19 in choosing a physician or hospital, there is no reason to believe they would know 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

29 that Defendant’s communications, identi fied by a trademark looking deceptively 1 like Plaintiff’s, are in fact notPlaintiff’s communications. 2 Defendant argues that this circumstance cannot occur because it has no 3 screens in Plaintiff’s facilities. Nonetheless, the fact that patients attend Plaintiff’s 4 facilities does not mean that they are not also treated in other medical offices 5 where Defendant has placed screens. Pote ntial patients of Plaintiff might see 6 Defendant’s screens with De fendant’s marks in the offices where they currently 7 receive treatment, and might assume on s ubsequently observing Plaintiff’s mark 8 that the communications they saw in t hose other offices came from Plaintiff. 9 Furthermore, the concern for confus ion does not relate exclusively to 10 Plaintiff’s patients and potential patients. It concerns also doctors and nurses whom 11 Plaintiff might wish to recruit into its network. Although such persons obviously 12 have far greater knowledge and sophistication with respect to the practice of 13 medicine than ordinary patients, there is no reason to believe that doctors and 14 nurses who are not affiliated with Plaintif f know whether Plaintiff does or does not 15 sponsor the content broadcast by Defenda nt. A doctor’s opinion of Defendant’s 16 content might well influence the doctor’s s ubsequent decision whether to associate 17 her practice with Plaintiff’s network, or wh ether to refer a patient. In other words, 18 even if some observers of Plaintiff’s and Defendant’s trademarks might have 19 sufficient familiarity with Plaintiff’s or Defendant’s businesses to know that, 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

30 notwithstanding the extraordinary similarity of their marks, there is no affiliation 1 between them, a substantial segment of the persons whose favorable opinion is 2 important to Plaintiff’s success in busin ess would have no reason to know that 3
Defendant’s communications are not affilia ted with Plaintiff. This factor favors 4 Plaintiff. 5

e. The Remaining Factors 6 7 On our particular facts, the remaining Polaroid factors have little bearing on 8 the ultimate conclusion. We address each briefly. 9 i. Relative Quality 10 Differences in relative quality as betwee n a senior user’s and a junior user’s 11 merchandise primarily affects the potential fo r harm to the senior user’s reputation, 12
and can also affect the likelihood of consum er confusion. In this case, there is no 13 claim, or showing, that relative quality should play any role in the court’s 14 determination. 6 15 ii. Defendant’s Intent 16

6 While Plaintiff does not contend it will be harmed by poor quality in Defendant's product, it does reasonably assert that it will su ffer harm with some of its constituents because Defendant's transmissions exhibit advertising by pharmaceutical companies. Plaintiff refuses to host advertising to avoid an appearance of partia lity that might harm its eligibility to conduct clinical trials and receive f unding for research. The argument is a reasonable one. It suggests that, at least in some circumstances, the Polaroid factor that ordinarily focuses on the quality of the junior user’s commerce can also be affected by the nature or subject matter of the junior user’s commerce when those are objectionable for whatever reason to the senior user's customers.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

31 The most likely relevance of bad fa ith on the part of a junior user in 1 choosing a mark similar to a senior us er’s bears primarily on the appropriate 2 remedy for the junior user’s infringement. Bad faith is not an essential element of a 3 claim of infringement. 4 In any event, Plaintiff does not cont end that Defendant adopted its marks 5 with the hope of deceiving consumers ab out a relationship be tween Defendant and 6 Plaintiff. And while reasonable minds might question the likelihood that the person 7 who designed Defendant’s mark s could have produced a de sign so nearly identical 8 to Plaintiff’s without ever having seen it, the designer of Defendant’s logo denied 9 having seen it. Plaintiff has not pressed for a contrary conclusion. The district court 10 found no bad faith, and it appears the issue is of no pertinence to this appeal. 11 iii. Actual Confusion 12 Instances of actual confusion resulting from a junior user’s use of a mark 13 similar to a senior user’s can be pow erful evidence supporting a likelihood of 14 confusion. At the same time, if the two marks have been in use over a substantial 15 period of time without ever producing instan ces of confusion, this fact can support 16 a junior user’s contention that confusion is not likely. See McGregor-Doniger Inc. 17 v. Drizzle Inc. , 599 F.2d 1126, 1136 (2d Cir. 1979), superseded by rule on other 18 grounds as recognized by Bristol-M yers Squibb Co. v. McNeil-P.P.C., Inc. , 973 19 F.2d 1033 (2d Cir. 1992). However, the ab sence of evidence of actual confusion 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

32 does not necessarily prove anything, especi ally when there has been neither long 1 nor significant experience of the two tradem arks operating side-by-side in the same 2 market. Unless evidence of actual confusion falls into the senior user’s lap, as 3 where it receives inquiries from the public about the junior user’s products, 4 absence of evidence of actual confus ion does not necessarily support the 5 proposition that there has been no confusi on. Evidence of actual confusion can be 6 both expensive and difficult to obtain. Lois Sportswear, U.S.A., Inc. v. Levi Strauss 7
& Co. 799 F.2d 867, 875 (2d Cir. 1986). If a patient sitting in a doctor’s waiting 8 room, who had some familiarity derived from prior experience with Plaintiff’s 9 trademark, saw Defendant’s content on a waiting-room screen and believed, based 10 on the trademark’s similarity to Plainti ff’s mark, that the message was produced by 11 Plaintiff, it would be very difficult for Pl aintiff to obtain ev idence of that fact. 12 Accordingly, it is “black letter law th at actual confusion need not be shown 13 to prevail under the Lanham Act, since actual confusion is very difficult to prove 14 and the Act requires only a likelihood of confusion as to source.” Id. See also 15 Arrow Fastener Co., Inc. v. Stanley Works , 59 F.3d 384, 397 (2d Cir. 1995) 16 (stating that the issue of actual confusio n is “not dispositive of the question of 17 likelihood of confusion”). 18 There is no evidence in this record of actual consumer confusion. Plaintiff 19 presented no consumer surveys, and ac knowledged that it was not aware of any 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

33 actual consumer confusion. While Plaint iff’s case would of course be even 1 stronger if it had evidence of actual c onsumer confusion, the absence of such 2 evidence does not particul arly weaken Plaintiff’s showing of likelihood of 3 confusion given how persuasively the factors discussed above support that 4 probability. Accordingly, this factor has no significant bearing on this appeal. 5 iv. Bridging the Gap 6 The factor that focuses on the “likeli hood that the prior owner will bridge the 7 gap,” Polaroid Corp. , 287 F.2d at 495, becomes pertinent primarily when the 8 junior user makes a credible case that there is little or no likelihood of consumer 9 confusion because the senior user operates in a different field of enterprise or a 10 different geographic area. In such circum stances, the senior user can undercut the 11 force of the junior user’s argument by showing a likelihood that it will expand 12 geographically or into other areas of co mmerce so that the likelihood of confusion 13 will increase. The senior us er of the mark is the en titled user and should not be 14 confined within the present scope of its commerce by the risk of confusion that 15 will result from a reasonably plausi ble expansion of its business. See Savin Corp. 16 v. Savin Group , 391 F.3d 439, 459-60 (2d Cir. 2004) (stating that this factor “is 17 designed to protect the senior user’s interestin being able to enter a related field at 18 some future time”). 19 In our case, because Defendant is alr eady using its marks in both the subject 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

34 matter area and the geographic area of Plaintiff’s commerce, there is no gap. 1 Defendant’s use of its marks already causes an actionable likelihood of confusion. 2 Resolution of the question of likelihood of confusion does not depend on whether 3 Plaintiff will expand its commerce. 7 Upon the facts of this case, the likelihood of 4 Plaintiff’s expansion has no real pertin ence to whether Defendant’s continued, 5 unchanged use of its marks is likely to cause unacceptable confusion. In other 6 words, it has no bearing on the question wh ether Plaintiff has adequately proven 7 Defendant’s liability. 8 8 f. Overall Likelihood of Confusion 9 On the question whether Plaintiff ade quately proved Defe ndant’s liability, 10 based primarily on likelihood of confus ion in the marketplace resulting from 11
Defendant’s use of marks conf usingly similar to Plaintiff’s , we conclude that this 12 was amply shown and therefore affirm th e district court’s finding of liability. 13 Although the ultimate inquiry on the questi on of liability is often referred to as a 14 “balancing test,” see, e.g. , Starbucks Corp. , 588 F.3d at 115, in this case we find no 15

7 In any event, even to the extent that Pl aintiff and Defendant di d operate in different parts of the healthcare field, Plaintiff presented evidence of intent to expand into Defendant’s specific market with its digital signage program. 8 Although the likelihood of Plaintiff's future expansion has no bearing on whether it has adequately proven Defendant's liability based on Defendant's present use of its similar marks (because Plaintiff has demonstrat ed likelihood of confusion regardless of whether Plaintiff expands its commerce), we recogni ze that the likelihood of Plain tiff's expansion might have a bearing on the terms of an injunc tion imposed on Defendant. This issue is discussed in the next section of this opinion.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

35 need to balance. The extr aordinary similarity of the marks, the proximity of 1 commerce both as to subject matter and geogr aphic area, the strength of Plaintiff’s 2 mark, and the absence among consumers of sufficient sophistication to protect 3 against confusion, all work together to make a powerful showing of likelihood of 4 confusion. The other factors, which are so metimes pertinent to a determination of 5 liability, have little or no pertinence on the particular facts of this case. 9 6 On the other hand, the district court appeared to conclude that, because 7 under present circumstances it found no probability of confusion resulting from 8 Defendant's use of its marks outside Gu thrie's Service Area, Plaintiff was not 9 entitled to an injunction outside that ar ea. This was a misunderstanding of the 10 law. We discuss this issue further in the next section dealing with the scope of the 11 injunction. 12 C. Scope of the Injunction 13 Plaintiff contends the district c ourt misapplied the governing law in 14 fashioning a narrowly limited injunction, wh ich failed to give Plaintiff adequate 15 protection from Defendant's use of virt ually identical marks. We agree. 16 It appears the district court reasoned th at, because a senior user must show 17 not only a possibility but a probability of c onfusion in order to win entitlement to 18

9 The district court concluded that three factors—actual c onfusion, bridging the gap, and bad faith–favored Defendant. We ag ree to the limited extent that consideration of these factors did not strengthen Plaintiff's case.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

36 an injunction, a senior user that show s such a probability of confusion in one 1 geographic area and thus wins an injuncti on, is not entitled to have the injunction 2 apply to additional areas, unless the senioruser proves a probability of confusion 3 in those additional areas as well. The c ourt credited Plaintiff with having proven a 4 probability of confusion in the Guthrie Service Area and accordingly awarded an 5 injunction covering that area. But as fo r additional areas, the court found that 6 Plaintiff had failed to satisfy the probability standard, and accord ingly concluded it 7 was not entitled to an injunction going beyond the Service Area. 8 This misinterpreted the law. It is co rrect that a senior user must prove a 9 probability of confusion in order to win an injunction. But it does not follow that 10 the injunction may extend only into areas for which the senior user has shown 11 probability of confusion. It is not as if the senior user must prove a new claim of 12 infringement for each geographic area in wh ich it seeks injunctive relief. Once the 13 senior user has proven entitlement to an injunction, the scope of the injunction 14 should be governed by a variety of equ itable factors—the principal concern 15 ordinarily being providing the injured seni or user with reasonable protection from 16 the junior user’s infringement. Of course, if the junior user demonstrates that in a 17 particular geographic area there is no like lihood of confusion, ordinarily no useful 18 purpose would be served by extending the injunction into that area, potentially 19 inflicting great harm on the junior userwithout meaningful justification. See Dawn 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

37 Donut Co. v. Hart’s Food Stores, Inc ., 267 F.2d 358, 364-65 (2d Cir. 1959) 1 (upholding the district court’s finding that , “in view of the plaintiff’s inactivity for 2 about thirty years in exploiting its tradem arks in defendant’s trading area at the 3 retail level . . . there was no reasonable e xpectation that plaintiff would extend its 4 retail operations into defe ndant’s trading area”). 5 Plaintiff complains particularly that the court’s order (i) expressly allows 6 Defendant to use what is essentia lly Plaintiff’s logo on the Internet, 7 notwithstanding that these uses unquestionably enter the Guthrie Service Area and 8 will predictably cause confusion there, ( ii) does not even prohibit Defendant from 9 making local use of the infringing marks in two counties where Plaintiff operates 10 facilities, and (iii) leaves Defendant free to use what is essentially Plaintiff’s mark 11 throughout the nation, beyond the counties where Plaintiff oper ates facilities, 12 despite Plaintiff’s showing of some likelihood of confusion beyond its Service 13
Area. 14 All three of these arguments have merit. The first problem with the 15 injunction is that it allows Defendantto make substantial use of the 16
marks within the Guthrie Service Area. The court’s ruling leaves Defendant free to 17 use the marks on the Internet, notwithst anding that Defenda nt’s webpages are 18 accessible in Plaintiff’s Service Area, and are lik ely to cause confusion 19 there. Secondly, the district court also expressly allowed De fendant unrestricted 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

38 use of the marks in two counties (T ompkins and Schuyler) where Plaintiff 1 maintained healthcare facilities, explai ning that Plaintiff had “presented no 2 evidence regarding the setup of these loca tions, in particular the patient waiting3 room experience there ... [and ] [a]ccordingly ... ha[d] not proven that any patient 4 exposure to [Defendant’s] content in wait ing rooms in those counties would occur 5 or would be similar to exposure in the 11 counties discussed at trial.” The court's 6 explanation for excluding these counties where Plaintiff maintains patient care 7 facilities from the scope of the inj unction seems to us unpersuasive. 8 Regarding Plaintiff's argument that the district court erred by allowing 9 Defendant to continue to use its marks throughout the nation, Defendant responds 10 by citing and misreading circuit precedent, in particular Dawn Donut Co. , 267 F.2d 11 358; Starter Corp. v. Converse, Inc. , 170 F. 3d 286 (2d Cir. 1999); and Brennan’s, 12 Inc. v. Brennan’s Restaurant, LLC , 360 F.3d 125 (2d Cir. 2004). We agree with 13 Plaintiff that the district court did not correctly apply the law and the equities in so 14 limiting the injunction. 15 The district court relied primarily on the proposition asserted in Starter 16 Corp. that a permanent injunction must be “n arrowly tailored to fit specific legal 17 violations” and that a court “should no t impose unnecessary burdens on lawful 18 activity.” Starter Corp. , 170 F.3d at 299. This proposition is without question a 19 correct statement of the law. However, it doe s not follow from it that a senior user 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

39 who has proven entitlement to an inj unction affecting one geographic area by 1 reason of the junior user’s infringemen t must show the same high degree of 2 probability of harm in every further ar ea into which the injunction might extend, 3 thus allowing the infringer free use of the infringing mark in all areas as to which 4 the senior user has not shown a substantia l probability of confusion. “[A] party 5 who has once infringed a trademark ma y be required to suffer a position less 6 advantageous than that of an innocent part y . . . and a court can frame an injunction 7 which will keep a proven infringer safely away from the perimeter of future 8 infringement.” Patsy’s Brand, Inc. , 317 F.3d at 220 (internal citations and 9 quotation marks omitted). 10
Defendant’s reliance on Dawn Donuts is misplaced for several reasons. In 11 that case, the absence of likelihood of confusion was proven by the defendant by 12 showing that in 30 years of operation the pl aintiff had never sought to use its mark 13 in the defendant’s area. The court noted that th ere was “ample evidence” 14 supporting the absence of likelihood of confusion. Dawn Donuts Co. , 267 F.2d at 15 365. Furthermore, the court ruled that, if the plaintiff later made a showing of 16
intent to use the mark in the defendant’s ma rket area, then the plaintiff “may later . 17 . . be entitled to enjoin defendant’s use of the mark.” Id. Finally, Dawn Donuts , 18 did not present the problem, like this case, of a plaintiff who has shown entitlement 19 to an injunction in one geographic area and seeks to have the injunction extend 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

40 beyond as well. It therefore has no per tinence to the question at issue here. 1
Brennan’s is also inapposite. In Brennan’s, the court had found no showing 2 of likelihood of confusion, and therefore no infringement. Brennan’s, Inc. , 360 3 F.3d at 130, 134. It did not involve our question of the propriety of extending the 4 scope of an injunction against a proven infringer beyond the geographic area where 5 the likelihood of confusion is most intense. 6 Nor does Starter Corp., support the district court’s approach. While that case 7 did involve the scope of the injunction awarded against a proven infringer, the 8 reasons that justified the Court of App eals in concluding that the injunction was 9 too broad were very different. At the tr ial, the plaintiff’s own witnesses had 10 testified that the particular use by the de fendant that was ultimately found to have 11 been wrongly enjoined “was not at issue in [the] litigation and its attorneys so 12 agreed.” Starter Corp. , 170 F.3d at 300. Furthermore, the plaintiff had “virtually 13 conceded that there would be no ‘likelihood that purchasers of the product may be 14 misled in the future.’” Id. (citation omitted). 15 In our case, in addition to proving th at Defendant was infringing Plaintiff’s 16 mark, subjecting Plaintiff to a high probab ility of confusion in its main Service 17 Area, Plaintiff has also shown that its activities and commercial relationships 18 extended beyond that area, rendering it vu lnerable to plausibly foreseeable 1914-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

41 confusions and harms resu lting from Defendant's use of the marks outside the 1 Guthrie Service Area. 2 Plaintiff recruits doctors, resident s, and nursing students nationwide; it 3 disseminates medical information over the Internet; it receives referrals from other 4 physicians and medical profe ssionals, who may be anywhe re in the country; and, 5 with respect to its medical research and clinical trials, it solicits funding beyond its 6 Service Area. In all of these activities, Plaintiff is exposed to the risk of confusion 7 and harm resulting from De fendant’s use of the marks outside that area. For 8 example, in order to avoid the fact or appearance of conflict of interest, which 9 might harm its reputation with funders of its medical research or cause it to be 10 disqualified by U.S. Government agencies fro m clinical trials, Plaintiff takes care 11 not to endorse products or host advertisemen ts for third-party products or services. 12 If Defendant’s transmissions were to display advertising of pharmaceutical 13 products or endorsements, and this were observed outside the Guthrie Service Area 14 by Plaintiff’s potential funders or by gove rnment agencies, who would predictably 15 believe that what they saw came from Plai ntiff, Plaintiff could suffer serious harm 16 to its reputation, impacting its receipt of funding grants or its eligibility to conduct 17 clinical trials. Furthermore, potential doc tors and nurses around the country whom 18 Plaintiff seeks to recruit might well be affected in their employment decisions by 19 what they see on Defendant’s screens or transmissions. The same might apply to 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

42 referrals of patients. 1 The district court’s limitation on the ge ographic scope of the injunction also 2
could cause Plaintiff substantial harm in another manner. Because the district court 3 authorized Defendant to use what is in e ffect Plaintiff’s mark as Defendant’s mark 4 outside the Service Area, Plaintiff, wh ich now operates over 100 facilities in the 5 Twin Tiers region, cannot expand beyond t hose borders without subjecting itself to 6 a high risk of consumer confusion. This cloud affecting Plaintiff’s mark beyond the 7 counties where it presently maintains f acilities might substantially impair its 8 opportunity for growth and its eligibility as a prospec tive merger partner with 9 entities operating outside its Service Area, diminishing its value as a commercial 10 entity. See Savin Corp. , 391 F.3d at 459-60 (discussing the need to “protect the 11 senior user’s interest in being able to enter a related field at some future time”). 12 No doubt, an injured senior user must show evidence of plausibly 13 foreseeable confusion beyond its main area of injury before the trial court is 14 required even to consider extending the inj unction into such additional areas. In the 15 evidence summarized above Plaintiff eas ily satisfied that requirement. 16 In so ruling, we do not imply that senior users who prove likely confusion 17 and infringement by a junior user’s use of their marks in their area of operation are 18 necessarily entitled to injunctions extending beyond their geographic area of 19 operation. Every case turns on its particular facts, and in many instances it will be 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

43 clear, for a variety of reasons, that an injunction of narrow geographic scope will 1 grant the senior user completely adequate protection, and that an injunction going 2 further would be not only unnecessary but unjust. Trademark cases vary 3 enormously depending on highly specific factual differences, so that it is perilous 4 to generalize in asserting ru les. Plaintiff in our case ma de a showing of plausibly 5
foreseeable confusion and harm resulti ng from Defendant’s use of its marks 6 beyond the area where confusion was pr obable. Even assuming it failed to 7 show probability of confusion beyond its Service Ar ea, that is not the governing 8 standard in such circumstances. Plainti ff was entitled to have the district court 9 consider extending the injunction beyond the area where confusion was probable 10 upon proper consideration of all the equities. 10 11 We recognize further that the compe ting equities do not always favor a 12 senior user that has shown infringeme nt. Cases frequently arise in which 13 imposition of a broad injunction on an i nnocent infringer, which had no realistic 14 way of knowing that its mark was subject to a prior claim, would cause the junior 15

10 Nor do we imply that a prevailing plaintiff operating within a narrow service area is necessarily entitled to an inj unction barring the infringing defenda nt from using its mark on the Internet because of the availability of material onthe Internet within the plaintiff’s service area. The proper scope of the injunction depends on likelihood of confusion, which in turn depends on innumerable variable factors. The particular f acts of this case lead us to conclude that Defendant’s use of the logo on the Internet will cau se sufficient likelihood of confusion to justify barring Defendant from Internet use. In othe r infringing circumstances, whether because of differences in the marks, geographic separation, differences between plai ntiff’s and defendant’s commerce, or other reasons, a defendant’s use of its mark on the Internet would cause little or no likelihood of confusion, and need not be enjoined.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

44 user a catastrophic loss of goodwill acquire d through investment of years of toil 1 and large amounts of money. In such cas es, notwithstanding that the legal right 2 unquestionably belongs to the senior user , competing equities can complicate the 3 issue of the breadth of injunctive relief. In our case, in contrast, a number of 4 equitable considerations appear to favor Plaintiff. 5 Although Defendant did not act with ba d faith in the sense of deliberately 6 sowing confusion between its marks and Plaintiff’s, De fendant could easily have 7 avoided the problem that arose from its adoption of marks already reserved by 8 another user. Precisely for the purpose of giving notice of its mark to the world, 9 Plaintiff had registered its mark with the PTO. Had Defendant exercised the 10 precaution of running a trademark search be fore launching its marks, it would have 11 learned that they were unavailable and w ould surely have had the good sense not to 12 proceed with a logo so nearly identical to one for which trademark rights were 13 already established. Defendant did not c onduct a trademark search until it sought to 14 register its marks and was notified by the PTO on February 28, 2012, that the 15 marks it sought to register were “striki ng[ly] similar” to Plaintiff’s already 16 registered mark. Accordingly, while Defendant is not a “bad faith” infringer, nor is 17 it an entirely innocent infringer. The govern ment had placed a convenient tool at 18 its disposition, which it could have used to avoid this infringement, and it failed to 19 utilize that tool. 2014-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

45 Furthermore, this is not a case in which an injunction would have 1 catastrophic effects on the infringer’s bus iness. In some cases, an innocently 2 infringing junior user has invested many y ears of toil and large sums of money in 3 the development of goodwill in its mark befo re learning of the prior reservation of 4 rights. Defendant here had onl y recently begun using the l ogo. Nor is this a case in 5 which the junior user is comp elled to give up the name of its business. What is at 6 stake is only the use of a decorative logo. No reason appears why Defendant 7 cannot change its logo to one that is not confusingly similar to Plaintiff’s without 8 suffering major harm to its business. 11 Finally, Plaintiff is the injured party, and so 9 far as we can se e was without fault in the matter. 10 Finally, the equitable interests to be considered in fashioning an injunction 11 are not only those of the parties to the litig ation. An important beneficiary of the 12 trademark system is the public. The public ha s a great interest in administration of 13 the trademark law in a manner that protect s against confusion. By perpetuating a 14 highly confusing circumstance, the court’ s injunctive order harmed that public 15 interest. The public interest would undoubt edly be better served by the elimination 16 of this confusion. 17

11 The district court might c ontemplate diminishing any harm to Defendant caused by a mandatory logo change by allowing the change to be made in stages, perhaps beginning with the addition of a reasonably prominent disc laimer of connection to Plaintiff.14-3343-cv(L) Guthrie Healthcare System s v. ContextMedia, Inc.

46 For the reasons explained above, we a ffirm the district court’s finding of 1 liability to the extent it found that Defenda nt infringes Plaintiff’s mark. However, 2
to the extent the court ruled that Defenda nt has not infringed Plaintiff’s mark by 3 using its marks outside Plaintiff’s main Se rvice Area, its judgme nt is vacated. The 4 injunction ordered by the district court is affirmed to the extent that it enjoined 5
Defendant from use of its ma rks. The scope of the inj unction is hereby expanded to 6 include Tompkins and Schuyler counties. We vacate the district court’s order to the 7 extent it leaves Defendant free to use its marks outside Plaintiff’s Service Area, 8 and in online applications. We leave it to th e district court to determine whether the 9 injunction can be tailored to allow Defenda nt some limited use of its marks outside 10 Plaintiff’s Service Area (expanded to in clude Tompkins and Schuyler counties) 11 and on the Internet, giving due weight to Pl aintiff's interest in protection from the 12 risk of confusion in th e marketplace and to all other appropriate equitable 13 considerations. The matter is remanded fo r further proceedings in accordance with 14 this ruling. 15 CONCLUSION 16 The judgment of the district court is AFFIRMED in part, REVERSED in 17 part, and VACATED in part, and th e matter is REMANDED for further 18 proceedings in accordance with this opinion. An appeal from the district court’s 19 amended judgment should be referred to this panel. 20