Mount Nittany Med. Ctr. v. Nittany Urgent Care, P.C.

MOUNT NITTANY MEDICAL CENTER, Plaintiff v. NITTANY URGENT CARE, P.C., Defendant

No. 4:11-cv-622

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

Dated: November 22, 2011

(Chief Judge Kane)

MEMORANDUM

Currently pending before the Court is Plaintiff Mount Nittany Medical Center's ("Mount Nittany") motion for default judgment pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. (Doc. No. 17.) Plaintiff commenced this action by filing a complaint against Nittany Urgent Care ("Nittany") on April 4, 2011, alleging service mark infringement, trade name infringement, false representation of origin, and unfair competition in violation of the Lanham Act and Pennsylvania law. (Doc. No. 1.) Instead of serving the complaint on Nittany, Mount Nittany sent Nittany a demand letter with a copy of the complaint attached as an exhibit, offering to delay serving the complaint if Nittany would agree to change its name within a reasonable period of time. On July 22, 2011, Mount Nittany filed an amended complaint, and on July 25, 2011, Mount Nittany served the complaint, amended complaint, and summons on Nittany. (Doc. Nos. 3, 4.) To date, Nittany has failed to plead or otherwise defend itself in this action. On September 29, 2011, Mount Nittany moved for entry of default pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. (Doc. No. 13.) The clerk of court entered default on September 30, 2011. (Doc. No. 14.) On October 14, 2011, Mount Nittany moved for default judgment. (Doc. No. 17.) In the motion for default judgment, Mount Nittany indicates that it seeks a permanent injunction and an order that Nittany pay Mount Nittany's costs. (Id.) Upon review of Mount Nittany's amended complaint (Doc. No. 3), motion for entry of default (Doc.No. 17), and supporting affidavits and documents (Doc. Nos. 18, 19, 20) the Court will enter default judgment against Nittany in the form of a permanent injunction.

I. ENTRY OF DEFAULT JUDGMENT

Rule 55(b)(2) of the Federal Rules of Civil Procedure authorizes a district court to enter a default judgment against a properly served defendant who fails to file a timely responsive pleading. Anchorage Assocs. v. Virgin Is. Bd. of Tax Rev., 922 F.2d 168, 177 n.9 (3d Cir. 1990). "Three factors control whether a default judgment should be granted: (1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct." Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). However, when a defendant has failed to appear or respond in any fashion to the complaint, this analysis is necessarily one sided; entry of default judgment is typically appropriate in such circumstances at least until the defendant comes forward with a motion to set aside the default judgment pursuant to Rule 55(c). See Anchorage Assocs., 922 F.2d at 177 n.9.

Here, it is clear that the factors weigh in favor of granting default judgment. First, if default is denied, then Mount Nittany will be prejudiced by ongoing infringement by Nittany. As to the second and third factors, because Nittany has failed to participate in the litigation process in any way, the Court cannot speculate as to whether Nittany has a litigable defense, or whether Nittany's default is due to culpable conduct. Thus, entry of default judgment is appropriate in this case.

Because default judgment will be entered, "the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Comdyne I, Inc. v.Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (quoting 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2688 at 444 (2d ed. 1983)). The allegations in the amended complaint, taken as true, are sufficient to support claims for: (1) trademark infringement under 15 U.S.C. § 1141(1); (2) false designation of origin and unfair competition under 15 U.S.C. § 1125(a); and (3) trademark infringement, trade name infringement, and unfair competition under Pennsylvania common law. Claims for federal trademark infringement, 15 U.S.C. § 1114, and federal unfair competition, 15 U.S.C. § 1125(a)(1)(A), are measured by identical standards. "To prove either form of Lanham Act violation, a plaintiff must demonstrate that (1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion." A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000). Further, "[t]he test for common law trademark infringement and unfair competition is essentially the same as the test for infringement and unfair competition under the Lanham Act." Tillery v. Leonard & Sciolla, LLP, 521 F. Supp. 2d 346, 348 (E.D. Pa. 2007) (citing Fisons Horticulture, Inc. v. Vigoro Indus., 30 F.3d 466, 472 (3d Cir.1994)).

As to the first two elements, "[r]egistration of a mark under the Lanham Act constitutes prima facie evidence of the mark's validity and its ownership by the registration." Members First Fed. Credit Union v. Members 1st Fed. Credit Union, 54 F. Supp. 2d 393, 403 (M.D. Pa. 1999) (citing 15 U.S.C. § 1115). Here, Mount Nittany has used its trade name and service mark in commerce since 2004, and its marks are federally registered. (Doc. No. 3 ¶¶ 9, 11-12.) Thus, in the absence of any argument against the validity and ownership of the Mount Nittany marks, Mount Nittany has established the first two elements of trademark infringement and unfaircompetition.

With respect to the third element, the United States Court of Appeals for the Third Circuit has specified ten factors to be considered in determining whether a defendant's use of its mark to identify goods or services causes a likelihood of confusion:

(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 with out evidence of actual confusion; (5) the intent of the defendant in adopting the mark; (6) the evidence of actual confusion; (7) whether the goods, though 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 because of the similarity of functions; and (10) other facts suggesting that the consuming public might expect the prior owner to manufacture a product in the defendant's market or that he is likely to expand into that market.

Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462-63 (3d Cir. 1983).

Here, the Lapp factors weigh in favor of a finding that there is a likelihood of confusion between Nittany's trade name and service mark, and Mount Nittany's trade name and service marks. The marks are substantially similar, with Nittany's mark and Mount Nittany's mark both including the word "Nittany." In fact, Mount Nittany alleges that there is actual confusion between Mount Nittany's business and services and Nittany's business and services. (Doc. No. 3 ¶ 16.) According to Plaintiff's amended complaint, Mount Nittany's mark is well known in the Centre County region, thus supporting a finding that the mark is strong. (Id. ¶ 10.) Furthermore, the fact that the medical services offered by Nittany are essentially the same as those provided by Mount Nittany weighs heavily in favor of a finding of consumer confusion. The Court is satisfied that use of the Nittany mark is likely to cause consumer confusion with MountNittany's marks. Thus, the allegations in Mount Nittany's complaint are sufficient to support claims for: (1) trademark infringement under 15 U.S.C. § 1141(1); (2) false designation of origin and unfair competition under 15 U.S.C. § 1125(a); and (3) trademark infringement, trade name infringement, and unfair competition under Pennsylvania common law.

II. INJUNCTIVE RELIEF

Mount Nittany has requested a permanent injunction, barring Nittany from continuing its infringing conduct. "A permanent injunction issues to a party after winning on the merits and is ordinarily granted upon a finding of trademark infringement." Lermer Germany GmbH v. Lermer Corp., 94 F.3d 1575, 1577 (Fed. Cir. 1996). A plaintiff seeking a permanent injunction must demonstrate: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).

First, Mount Nittany has suffered irreparable harm due to the finding that Nittany's mark creates a likelihood of confusion. See Citizens Fin. Group, Inc. v. Citizens Nat'l Bank of Evans City, 383 F.3d 110, 125 (3d Cir. 2004); Shields v. Zuccarini, 254 F.3d 476, 486 (3d Cir. 2001); S & R Corp. v. Jiffy Lube Int'l, Inc., 968 F.2d 371, 378 (3d Cir. 1992) ("[T]rademark infringement amounts to irreparable injury as a matter of law."). Furthermore, an award of damages would be inadequate to compensate for the consumer confusion that may arise if Nittany were to continue using the Nittany mark, and may not be sufficient to deter Nittany's trademark infringement. See Louis Vuitton Malletier, S.A. v. Veit, 211 F. Supp. 2d 567, 585 (E.D. Pa. 2002).Additionally, damages from ongoing infringement would be difficult to determine. See A.O. Smith Corp. v. Fed. Trade Comm'n, 530 F.2d 515, 525 (3d Cir. 1976).

Next, the balance of hardships clearly supports the granting of a permanent injunction. Any injury that Nittany would suffer as a result of...