United States District Court, D. New Jersey
October 6, 2005.
M.D. ON-LINE, INC., Plaintiff,
WebMD CORPORATION, t/a EMDEON CORPORATION, EMDEON BUSINESS SERVICES, and EMDEON PRACTICE SERVICES, Defendants.
The opinion of the court was delivered by: WILLIAM MARTINI, District Judge
This matter comes before the Court on plaintiff M.D. On-Line,
Inc.'s ("M.D. On-Line's") motion for a preliminary injunction to
enjoin defendants from using the service mark "emdeon."
Plaintiff's mark "M.D. ON-LINE" is a federally registered service
mark for the field of "electronic data submission services
required for electronic processing of claims in the healthcare
industry." (Compl. Ex. A). Plaintiff alleges that defendants use
of the "emdeon" mark in the healthcare industry violates federal
and state trademark law, constitutes unfair competition under
federal and state law, and is causing it irreparable harm. For
the reasons set forth below, plaintiff's motion for preliminary
injunction is DENIED.
Plaintiff provides software solutions for healthcare providers.
Its three software packages, WebLINK, WinLINK and ClaimLink 1500,
allow healthcare providers to "electronically submit claims to
insurance companies for payment." (Compl. ¶ 1). Its software also
allows healthcare providers to verify electronically in real-time
the "eligibility of insurance coverage when patients seek
healthcare services from providers." (Compl. ¶ 17).
Defendants, formerly known as WebMD, now trading as some
variation of Emdeon, perform many services and provide many
products to the healthcare industry. Emdeon Corporation
("Emdeon") is the parent company; it is composed of four business
units: Emdeon Business Services, Emdeon Practice Services, WebMD
Health, and Porex. Emdeon's core businesses are dedicated to electronically connecting "healthcare
providers, payers, employers, physicians, and patients, to
simplify the healthcare business process, to provide needed
information at the right time and place, and to improve
healthcare quality." (Defs.' Opp'n Br. at 2). Emdeon provides the
"largest single electronic clearinghouse for healthcare claims in
the U.S." (Compl. ¶ 3). Emdeon processes the electronic claims
submitted by providers and from intermediaries such as M.D.
On-Line. (Id.). Currently, plaintiff and Emdeon have a
contractual relationship whereby plaintiff processes claims
through Emdeon's clearinghouse and Emdeon provides plaintiff with
rebates for those transactions based on volume. (Id. at ¶ 30).
This relationship accounted for approximately 40% of plaintiff's
revenue in 2004. (Defs.' Opp'n Br. at 5).
Emdeon Business Services ("EBS") is the business entity that
competes directly with plaintiff. (Id. at 5). EBS "offers
healthcare providers reimbursement services, allowing them to
interact electronically with healthcare payers." (Id. at 3).
EBS sells only one product that competes with plaintiff's
products WebMD Office. (Id. at 5). It is the marketing and
advertising of that product under the emdeon mark that lead
plaintiff to file suit and seek an injunction.
A preliminary injunction is an extraordinary form of relief
that should be granted in limited circumstances. NutraSweet Co.
v. Vit-Mar Enters., Inc., 176 F.3d 151, 153 (3d Cir. 1999). A
preliminary injunction should issue only when the moving party
establishes each of the following four factors: (1) that the
moving party has a reasonable probability of success on the merits; (2) that the moving party will be irreparably harmed if
denied relief; (3) that the non-moving party will not be harmed
to a greater extent if relief is granted; and (4) granting
preliminary relief will be in the public interest. Id. If the
moving party is unable to show any of those factors,
preliminary relief should be denied. Id.
I. Likelihood of Success on the Merits
In order to show a reasonable probability of success on the
merits, "the burden is on the party seeking relief to make a
prima facie case showing a reasonable probability that it will
prevail on the merits" of the claim. Oburn v. Shapp,
521 F.2d 142, 148 (3d Cir. 1975). "To prevail on a claim for trademark
infringement or unfair competition under the Lanham Act, the
owner of a valid and legally protectable mark . . . must show
that a defendant's use of a similar mark for its goods `causes a
likelihood of confusion.'" Kos Pharms., Inc. v. Andrx Corp.,
369 F.3d 700, 708-09 (3d Cir. 2004).
The Third Circuit has devised a nonexclusive list of factors,
referred to as the Lapp factors,*fn1 that the Court must
consider when analyzing likelihood of confusion. These factors
(1) the degree of similarity between the owner's mark
and the alleged infringing mark;
(2) the strength of the owner's mark;
(3) the price of the goods and other factors
indicative of the care and attention expected of
consumers when making a purchase;
(4) the length of time the defendant has used the
mark without evidence of actual confusion arising; (5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, competing or not competing,
are marketed through the same channels of trade and
advertised through the same media;
(8) the extent to which the targets of the parties'
sales efforts are the same;
(9) the relationship of the goods in the minds of
consumers, whether because of the near-identity of
the products, the similarity of function, or other
(10) other facts suggesting that the consuming public
might expect the prior owner to manufacture both
products, or expect the prior owner to manufacture a
product in the defendant's market, or expect that the
prior owner is likely to expand into the defendant's
Kos Pharms., 369 F.3d at 709 (quoting A & H Sportswear, Inc.
v. Victoria's Secret Stores, Inc., 237 F.3d 198
, 215 (3d Cir.
2000)). None of these factors alone determines whether there is a
likelihood of confusion. Rather, the Court must consider all of
these factors and give them the weight appropriate under the
particular circumstances before the Court. Id.
Plaintiff argues that it is likely to succeed at trial because
its M.D. ON-LINE mark is valid and legally enforceable, and
defendant's use of the emdeon mark is likely to cause confusion.
Defendants respond by arguing that plaintiff's mark is not
enforceable, and even if it is, there is no likelihood of
confusion between the marks M.D. ON-LINE and emdeon. The fact
that M.D. ON-LINE is a federally registered mark, see Fed. Reg.
No. 2,274,698, constitutes prima facie evidence of the mark's
validity. See 15 U.S.C. § 1115(a). Thus, for purposes of this motion, the Court will assume plaintiff's mark is valid and
enforceable. As a result, in order to resolve this dispute, the
Court must weigh and balance the Lapp factors.
1. Degree of Similarity Between the Marks
"The single most important factor in determining likelihood of
confusion is mark similarity." A & H, 237 F.3d at 216. Marks
"are confusingly similar if ordinary consumers would likely
conclude that [the two products] share a common source,
affiliation, connection or sponsorship." Fisons Horticulture,
Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 477 (3d Cir. 1994).
The proper test is "not side-by-side comparison" but "whether the
labels create the `same overall impression' when viewed
separately." Id. (quoting Banff, Ltd. v. Federated Dep't
Stores, Inc., 841 F.2d 486, 492 (2d Cir. 1988)). Courts should
"compare the appearance, sound, and meaning of the marks" in
assessing their similarity. Kos Pharms., 369 F.3d at 713.
The Court finds there is no similarity in appearance between
"M.D. ON-LINE" and "emdeon". Indeed, they are visually distinct.
Plaintiff's mark is two words, including two periods and one
hyphen; defendant's mark is one word without punctuation. They
are spelled differently. They differ in length (six versus eight
letters). They begin and end with different letters. M.D. ON-LINE
consists of all uppercase letters, emdeon contains none. Further,
M.D. ON-LINE often appears on two separate lines, M.D. over
ON-LINE, whereas emdeon does not.
The Court finds that the two marks do not have a similar
meaning. M.D. ON-LINE describes a service involving doctors on
the internet. Emdeon is a fanciful term that has no apparent
meaning. Plaintiff argues that emdeon has a similar meaning,
relying in part on a script that was generated for WebMD Business
Services. In that script, Emdeon states that its new name "suggests a grounding in e-healthcare." (O'Sullivan Cert. at
Ex. A). However, that script is inapposite. First, the script
details a branding effort by Emdeon in which it seeks to imbue a
certain meaning into the otherwise meaningless term "Emdeon."
Second, plaintiff takes the quote out of context in order to
establish some small degree of similarity. When the meaning
suggested by the script is looked at as a whole, there could be
no confusion between the two marks:
Our new name, Emdeon, references our history as WebMD
and formerly, Healtheon. It also suggests a grounding
in e-healthcare and denotes a solid organization
focused on improving healthcare and exceeding the
expectations of its business partners.
Plaintiff essentially argues that any differences in appearance
and meaning should be trumped by the marks' phonetic similarity.
Plaintiff bases this argument on the fact that the allegedly most
significant form of marketing performed by the parties is
telemarketing. Plaintiff also argues that word-of-mouth is
critical to its products' success. However, in making these
arguments, plaintiff appears to ignore the commercial reality of
how these software products are marketed. There is no dispute
that plaintiff's LINK products, as well as defendant's WebMD
Office, are used only over the internet, no physical
documentation is involved. Therefore, in order to market these
products, the parties would need to provide the website address
from which customers could read about, and potentially register
to use their products.*fn2 Thus, the appearance of the marks plays a role in the commercial setting, thereby
greatly diminishing the affect that sound alone may have on
Furthermore, the Court disagrees with plaintiff's underlying
premise that the marks are confusingly similar. Although
plaintiff is correct that the first three syllables of each mark
are pronounced similarly, by focusing on only the first three
syllables, plaintiff takes its whole mark out of context. See
Kos Pharms., 369 F.3d at 713 ("But the proper legal test is not
whether there is some confusing similarity between sub-parts of
the marks; the overarching question is whether the marks,
`viewed in their entirety,' are confusingly similar.")
(emphasis in original) (quoting A & H, 237 F.3d at 216). Its
mark is M.D. ON-LINE, not "M.D. ON". When the marks are heard in
their entirety, they are not confusingly similar. Plaintiff's
mark contains four syllables, emdeon contains only three. M.D.
ON-LINE is spoken as two separate letters and a two syllable
word, whereas emdeon is spoken as one word. Significantly, the
fourth syllable of plaintiff's mark the word "LINE" makes
plaintiff's mark end in a different sound. The Court believes
that that different sound makes the two marks sound dissimilar.
In short, when the marks are viewed in their entirety in the
proper commercial setting, this factor favors defendants.
2. Strength of the Owner's Mark
A Court must consider both the conceptual and commercial
strength of the owner's mark. Kos Pharms., 369 F.3d at 715. The
conceptual strength of a mark looks to its inherent features. A
& H, 273 F.3d at 221. Marks are classified into four categories
of descending conceptual strength: (1) arbitrary or fanciful; (2)
suggestive; (3) descriptive; and (4) generic. Id. Arbitrary and fanciful marks are the strongest marks entitled to the
greatest protection; generic marks are the weakest marks entitled
to no protection.
The Court believes that M.D. ON-LINE is either a descriptive or
suggestive mark. M.D. ON-LINE is descriptive to the extent that
it refers to products that place medical doctors on-line. See J
& J Snack Foods Corp. v. Nestle USA, Inc., 149 F. Supp. 2d 139,
147 (D.N.J. 2001) (A descriptive mark describes "the purpose,
function or use of the product, a desirable characteristic of the
product, or the nature of the product."). The mark is suggestive
to the extent it takes some imagination to determine that M.D.
ON-LINE provides software for electronically processing medical
doctors' claims over the internet. See A & H,
237 F.3d at 221-22 (suggestive marks require the consumer to exercise
"imagination, thought, or perception" to ascertain the nature of
the product or service). In any event, plaintiff's mark is
conceptually weak because of the ubiquity of its constituents.
There is no dispute that "M.D." is a term widely used in the
healthcare field to refer to medical doctors. (See Pl.'s Reply
Br. at 6). Nor is there any dispute that "on-line" is a term
widely used to describe products offered over the internet. (See
id.). That being the case, consumers are less likely to assume
that products made by a similar mark came from the same source.
See A & H, 237 F.3d at 223 (stating that extensive use of a
term, even in other markets, may have a "weakening effect on the
strength of the mark").
The marketplace recognition of a mark determines its commercial
strength. A & H, 237 F.3d at 221. The evidence appears to
demonstrate that plaintiff's mark has moderate commercial
strength. Plaintiff has used the name M.D. ON-LINE in the same
industry for over ten years, including the mark on all company
advertising and promotional materials during that time period.
The mark is featured on its website, as well as on co-branded
websites, i.e., websites of other companies that promote M.D. On-Line's products. (Compl. ¶
24; Bartzak Cert. ¶¶ 16-17). Mr. Patrick Kennedy, a consultant
for plaintiff who specializes in the field of electronic
communications between healthcare payers and providers and has
over twenty years of experience in the field, certified that
plaintiff is positively and widely recognized by healthcare
payers throughout the country for providing electronic claim
submission products and services. (Kennedy Cert. ¶¶ 1-2, 8-9).
Although plaintiff allegedly "spends an enormous portion of its
annual budget developing and promoting its products and services
offered under the M.D.ON-LINE® mark",*fn3 plaintiff did not
submit evidence demonstrating how much it spends on marketing and
advertising. That lack of evidence, however, does not undercut
the other evidence before the Court.
In sum, because plaintiff's mark has weak conceptual strength
and moderate commercial strength, the Court finds that this
factor slightly favors plaintiff.
3. Factors Indicative of the Care and Attention Expected of
This factor "weighs against finding a likelihood of confusion
`[w]hen consumers exercise heightened care in evaluating the
relevant products before making purchasing decisions.'" Kos
Pharms., 369 F.3d at 715 (quoting Checkpoint Sys., Inc. v.
Check Point Software Techs., Inc., 269 F.3d 270, 284 (3d Cir.
2001)). The parties consider the consumers to be healthcare
providers and payers who use the internet to process their
claims. (See Pl.'s Br. at 6; Defs.' Opp'n Br. at 21). More
specifically, they appear to be the "office manager" or "billing
administrator" in the doctor's office who uses a particular piece
of software to process patients' claims. (See, e.g., Sept. 22, 2005 Hearing Tr. ("Tr.") at 16:17-20). Plaintiff
acknowledges that the consumers are "arguably sophisticated."
(Pl.'s Br. at 13). Plaintiff's President and CEO agreed in his
deposition that the selection of an electronic billing service by
an officer manager is probably one of the more important tasks
that person performs. (See Bartzak Dep. at 73-74). He also
agreed that the officer manager would exercise some amount of due
diligence in performing that task. (See id.). Therefore, the
Court finds that the relevant consumers are knowledgeable
professionals office managers or billing administrators who
would exercise heightened care before selecting an electronic
claims processing service. (See Tr. at 43:11-16 (acknowledging
that the relevant universe of consumers is a "sophisticated
group")); see also Checkpoint, 269 F.3d at 285 ("Many cases
state that where the relevant buyer is composed of professionals
or commercial buyers familiar with the field, they are
sophisticated enough not to be confused.").
Plaintiff argues that defendants have a "well-known history of
growth through acquisition of competitors",*fn4 which would
likely lead consumers to believe that Emdeon acquired plaintiff.
However, this argument is unsubstantiated and, therefore, without
Accordingly, this factor favors defendants.
4./6. Length of Time Defendants' Mark Has Been Used Without
Confusion/Evidence of Actual Confusion
With regard to the fourth factor, the parties' "concurrent use
of `similar marks for a sufficient period of time without
evidence of consumer confusion about the source of the products'
allows `an inference that future consumers will not be confused
either.'" Kos Pharms., 369 F.3d at 717 (quoting Fisons, 30 F.3d at 476). Factor six
considers evidence of actual confusion. Id.
Defendants began using their emdeon mark on August 4, 2005.
(See Defs.' Br. at 7). As a result, the parties have used the
marks concurrently for approximately two months. This amount of
time appears to be too small to drawn any meaningful inferences
regarding whether the marks are confusingly similar.
Moreover, there is no evidence of actual confusion. Plaintiff
claims that after defendants publicly announced the name change
in August, "M.D. On-Line immediately began receiving
communications from industry insiders inquiring about the name
change and expressing their belief that confusion is likely to
result." (Pl.'s Br. at 14). However, this argument is meritless.
Plaintiff does not identify who these "industry insiders" are,
except that the Court is left with the impression that they are
not consumers. And, more importantly, the legal opinions of
industry insiders, that confusion is "likely to result," are
entitled to no weight. Neither is plaintiff's self-serving and
unsupported statement that "several third party payers . . .
expressed concern with the confusion they believe is created by
Defendant's rebranding." (Pl.'s Br. at 8). For purposes of actual
confusion, these opinions and concerns are irrelevant.
Plaintiff also submitted a survey to show actual confusion. The
survey was conducted by Mr. Kenneth Hollander, who has conducted
or critiqued a vast number of intellectual property surveys. The
survey was of 302 people who were employed by personal care
physicians, their employment involved submission of medical
claims to insurance companies, and the submission of those claims was done or prospectively would be done over the
internet. The test group was composed of 202 people, and the
remaining 100 people composed the control group.*fn5
The survey was conducted by telephone. The interviewer began by
asking the test group:
[Question] 1. One of the electronic claims processing
companies is named (EMDEON (EM-DEE-ON) . . .). The
second company is M.D. On-line. . . . If you have an
opinion, other than the fact that they are in the
same business, do you think that these two companies
are associated with each other, or that they are not
associated with each other?
(Pl.'s Ex. 2, Questionnaire). If the participant answered that
they are associated, he or she was then asked, "Why do you say
that? Why else?" (Id.). Then the interviewer asked:
[Question] 3. And if you have an opinion, do you
think that one of these companies is sponsored or
endorsed by the other company, or do you think that
neither company is sponsored or endorsed by the
(Id.). If the participant answered that one company is
sponsored or endorsed by the other, he or she was asked to
explain why. Lastly, the interviewer asked:
[Question] 5. Finally, do you think that one of these
companies had to get permission from the other
company, or that neither company had to get
permission from the other?
(Id.). If the participant answered that one of the companies
had to get permission, he or she was asked to explain why. After tallying the responses and contrasting the test group
with the control group,*fn6
Mr. Hollander estimates that
approximately 25.7% of the participants expressed that they
"thought that the two names . . . were affiliated or connected in
some way because of their same or similar name." (Hollander Cert.
¶ 5). However, this survey is both procedurally and substantively
flawed. First, plaintiff introduced the survey in its reply
brief, not its moving brief. This maneuver deprived the
defendants of a meaningful opportunity to respond within the
normal course. As such, the Court will disregard this "newly
minted" evidence. See Bayer AG v. Schein Pharm., Inc.,
129 F. Supp. 2d 705
, 716 (D.N.J. 2001), aff'd, 301 F.3d 1306
2002) (striking portions of reply brief which raised new issues
for the first time).
Second, even if the Court were to consider the survey, it
appears to suffer several flaws that render it unreliable, two of
which the Court will address at this time. "Survey evidence can
sometimes demonstrate evidence of actual confusion but only to
the extent `that the survey mirrors the real world setting which
can create an instance of actual confusion.'" Harlem Wizards
Entm't Basketball, Inc. v. NBA Properties, Inc.,
952 F. Supp. 1084, 1098 (D.N.J. 1997) (quoting 3 J. McCarthy, McCarthy on
Trademarks and Unfair Competition § 23.01[a])). Here,
plaintiff's survey does not mirror the "real world setting." The
marks in question identify the sources of web-based programs. And
yet, this survey was done over the telephone, participants were
not shown the marks, nor were they directed to websites that
contained the marks. Thus, any alleged association the
participants found between the marks was based on sound alone,
and does not address how the marks might be viewed in a
commercial setting. By removing the marks from their proper commercial setting,
plaintiff unjustifiably skewed the results.
Moreover, it is unclear whether any association between the
marks was actually based on aural similarity or due to the
leading nature of the questions asked. This Court finds Questions
1, 3 and 5 were leading questions. As Mr. Hollander is well
aware, and as he has represented to at least one other district
court, the probative value of leading questions is essentially
nil. IDV North Am., Inc. v. S & M Brands, Inc.,
26 F. Supp. 2d 815, 830 (E.D. Va. 1998) ("[A]ccording to Mr. Hollander, the
probative value of the survey is of virtually no utility on that
issue because Question Numbers 7 and 10 are leading questions
which invite answers that tend to suggest a likelihood of
confusion where none may exist."). Here, the questions
undisputedly asked participants whether there is an association
between plaintiff's mark and defendants' mark. This line of
questioning has been rejected as leading and suggestive and,
therefore, improper. Id. ("Thus, a question which asks survey
participants whether they believe that there is a connection
between the plaintiff's and defendant's goods and services has
been rejected as an improper leading question which lacks
probative value and which prejudices the reliability of the
survey."). Consequently, the Court concludes that plaintiff's
survey is entitled to little, if any, weight. See Prince Mfg.,
Inc. v. Bard Int'l Assocs., Inc., No. 88-3816, 1988 WL 142407,
*7-*8 (D.N.J. Dec. 22, 1988) (giving scant weight to a survey
that found 39.5% confusion rate because, in part, the survey did
not focus on how the mark was used on defendant's products and
asked a leading question).
In short, this factor favors neither party. 5. Defendants' Intent in Adopting Mark
Evidence that a defendant willfully adopted a mark closely
similar to an existing mark "weighs strongly in favor of finding
[a] likelihood of confusion." Checkpoint, 269 F.3d at 286. "The
adequacy and care with which a defendant investigates and
evaluates its proposed mark, and its knowledge of similar marks
or allegations of potential confusion, are highly relevant." Kos
Pharms., 369 F.3d at 721.
The evidence before the Court indicates an absence of bad faith
in adopting the emdeon mark. In 2004, WebMD Corporation
("WebMD"), a publicly traded company, announced that its
subsidiary, WebMD Health, was going public. In an effort to avoid
confusion in the investing public between the two companies,
WebMD sought to adopt a new public identity for itself and its
subsidiaries WebMD Business Services and WebMD Practice Services
because it believed WebMD Health was more closely associated with
the WebMD name. WebMD then hired Landor Associates, an outside
naming firm, to devise a new corporate name. Landor Associates
was not aware of plaintiff's M.D. ON-LINE mark. Following the
parameters WebMD gave them, Landor Associates, on the second
attempt, offered WebMD a list of ten potential names, one of them
being the name "Emdeon." WebMD personnel found the Emdeon name
appealing. A trademark clearance search was performed and
plaintiff's M.D. ON-LINE mark was not reported.
Plaintiff responds that WebMD acted in bad faith when it
adopted the emdeon mark because it knew of plaintiff's M.D.
ON-LINE mark. However, "mere knowledge of the existence of a
competitor's mark is insufficient to prove bad faith." NEC
Elecs., Inc. v. New England Circuit Sales, Inc.,
722 F. Supp. 861, 866 (D. Mass. 1989) (citing Ziebart Int'l Corp. v. After Market Associates, Inc., 802 F.2d 220, 227 (7th Cir.
1986)). Thus, given the undisputed history, the fact that WebMD
had knowledge of plaintiff's mark is insufficient evidence to
support a finding of bad faith.
Moreover, the Court seriously questions plaintiff's underlying
premise that WebMD would seek to adopt a mark confusingly similar
to M.D. ON-LINE. Although M.D. On-Line as a company may have
established good will and a positive reputation in its business,
it only operates within a very small niche of the healthcare
industry. Defendants, however, provide services and products that
extend far beyond that small niche, canvassing the healthcare
industry. In fact, defendants derive approximately 99% of their
revenue from businesses that do not compete with plaintiff. It
would appear, without more, to strain credulity that defendants
would hope to, or even could, trade off of plaintiff's niche good
will in such a wide range of unrelated businesses. Thus,
plaintiff has failed to proffer any evidence demonstrating that
defendants adopted the emdeon mark in bad faith.
Accordingly, this factor weighs in favor of defendants.
7. Whether Products Are Marketed Through the Same Channels of
Trade and Advertised in the Same Media
"[T]he greater the similarity in advertising and marketing
campaigns, the greater the likelihood of confusion."
Checkpoint, 269 F.3d at 288-89 (quoting Acxiom Corp. v. Axiom,
Inc., 27 F. Supp. 2d 478, 502 (D. Del. 1998)). This inquiry
requires the Court to examine the "media the parties use in
marketing their products as well as the manner in which the
parties use their sales forces to sell their products to
consumers." Id. at 289. Defendants acknowledge that they use similar methods of
marketing and advertising, but argue that they emphasize visual
marketing techniques, e.g., via its website, whereas plaintiff
emphasizes phonetic marketing, e.g., telemarketing. (Defs.' Opp'n
Br. at 23-24; Smith Cert. ¶ 33). Although defendants' argument
may diminish the weight given to this factor in the Court's
analysis, the extent to which defendants use one form of
marketing over another does not alter the fact that the parties
use the same methods. Defendants and plaintiff market their
products and services through websites, resellers, trade shows,
direct mail, provider referrals and telemarketing. (See Smith
Cert. ¶ 33; Bartzak Cert. ¶¶ 17-19). Consequently, this factor
8. Extent to which Targets of the Parties' Sales Efforts Are
The targets of the parties' sales efforts are the same to the
extent the focus is limited to selling electronic claims
processing software. Both parties target the same consumers . . .
office managers or billing administrators. See Factor 3
discussed above. Accordingly, this factor favors plaintiff.
9. Relationship of the Goods
"The closer the relationship between the products, . . . the
greater the likelihood of confusion." Lapp, 721 F.2d at 462.
The relevant question is . . . how closely related are the
products? Kos Pharms., 369 F.3d at 722-23. This question seeks
to determine "whether it would be reasonable for consumers to
associate [the products] or see them as related." Id. Here, the products are of the same type and function similarly.
They enable the electronic processing of healthcare claims. Any
differences in functionality the speed with which plaintiff's
consumers may begin using its software or the number of options
defendants' software provides do not detract from their overall
similarity. See Kos Pharms., 269 F.3d at 723 ("The question is
not whether it is possible to distinguish between the products
but whether, and to what extent, the products seem related,
`whether because of [their] near-identity, . . . or similarity of
function, or other factors.'") (quoting A & H,
237 F.3d at 215). Accordingly, this factor favors plaintiff.
10. Other Facts Suggesting the Public Might Expect the Prior
Owner to Manufacture Both Products
This factor allows courts to consider "the nature of the
products or the relevant market, the practices of the other
companies in the relevant fields, or any other circumstances that
bear on whether consumers might reasonably expect both products
to have the same source." Kos Pharms., 369 F.3d at 724.
Unlike in Kos Pharmaceuticals, where consumers could expect
the maker of one drug to make the other because it was
complimentary and could be viewed as a natural brand
extension,*fn7 there is nothing in the record to suggest
that consumers would expect Emdeon's software, which directly
competes against plaintiff's, to be an extension of plaintiff's
LINE products. Indeed, although the parties sell their products
under their respective marks, the products themselves have very
distinct names. Emdeon's product is called WebMD Office.
Plaintiff's products are called WebLINK, ClaimLink 1500 and WinLINK. These different
product names further distinguish the sources of the software and
make it unlikely that consumers would believe that Emdeon's
software is an extension of the LINK products.
In sum, the tenth factor favors defendants.
II. Weighing the Lapp Factors
This case essentially comes down to whether a mark that sounds
arguably similar to another mark, but is otherwise
distinguishable, should be enjoined from use. In order to place
this issue in context, it is necessary to take a step back in
time when plaintiff's mark was M.D. ON-LINE and defendants' mark
was WebMD. Notably, if the Lapp factor analysis conducted above
had been applied to these two marks, every factor would be
supported by the same facts but for the first similarity of the
marks. Under that factor, the marks would appear different, sound
different, but have a similar meaning. Apparently, when the WebMD
mark was used, consumers were not confused. But because
defendants changed their mark to emdeon, which appears different,
means something different, but arguably sounds similar, plaintiff
argues that is sufficient to enjoin its use. This Court
Similarity of the marks the most important factor weighs in
favor of defendants. As articulated above, the marks appear
different, mean something different, and sound different.
Further, consumers are sophisticated and exercise a heightened
degree of care before purchasing the products at issue. In
addition, the defendants adopted the emdeon mark in good faith.
Taking these factors together, the Court finds they outweigh the
factors favoring plaintiff. The dissimilarity in the marks
combined with consumer sophistication and care make it unlikely
that consumers will be confused even though the parties' products are
marketed through the same channels of trade, are targeted at the
same consumers, and function similarly. These products are used
over the internet. Any marketing done by the parties would, of
necessity, direct consumers to the appropriate website. As a
result, the sophisticated consumers will be able to readily and
easily distinguish between the parties' products. The plaintiff's
weak-to-moderate strength in its mark does not alter this
Accordingly, because a balance of the factors tips heavily in
favor of defendants, the Court finds that plaintiff has not
demonstrated that it has a reasonable likelihood of success of
demonstrating there exists a likelihood of confusion.
III. Irreparable Harm/Balancing of Equities/Public
Since there is no reasonable likelihood of success on the
merits, there can be no irreparable harm. See Cumberland Packing
Corp. v. Monsanto Co., 32 F. Supp. 2d 561, 580 (E.D.N.Y. 1999);
Microwave Sys. Corp. v. Apple Computer, Inc.,
126 F. Supp. 2d 1207, 1218 (S.D. Iowa 2000). As a result, the final two
preliminary injunction factors favor defendants as well. Clearly,
absent a showing of likelihood of confusion and irreparable harm,
the balancing of the equities and public interest require that
plaintiff's motion be denied. CONCLUSION
For the aforesaid reasons, plaintiff's motion for preliminary
injunction is denied.
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