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MEDIC ALERT FOUNDATION U.S., INC. v. COREL CORP.

March 31, 1999

MEDIC ALERT FOUNDATION UNITED STATES, INC., PLAINTIFF,
v.
COREL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Zagel, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff Medic Alert Foundation United States, Inc. ("Medic Alert") is a not-for-profit corporation that provides identification of and information about its members' non-apparent medical conditions for use in emergency situations. Medic Alert members wear jewelry (necklaces or bracelets) and carry wallet cards, each of which bears the Medic Alert logo, the member's individualized medical information, and a telephone number where more detailed medical information can be accessed. The Medic Alert logo consists of the words "MEDIC" and "ALERT" in all capital letters running from top to bottom on either side of a caduceus, a commonly recognized symbol of medicine and healing. Medic Alert's logo, trademark, and service mark are all duly registered and in use.

In 1991, Corel entered into a licensing agreement with TechPool Studios, Inc. ("TechPool") for a number of clipart images, including one that resembles the Medic Alert logo. The image ("first disputed image") is one of a circular pendant with the words "MEDIC" and "ALERT" depicted on either side of a caduceus and a cross-like symbol, stacked one on top of the other. One of TechPool's designers created the image by copying a bracelet that bore the Medic Alert logo, but did not bear the trademark registration symbol. TechPool did not have any sort of licensing agreement with Medic Alert, but represented to Corel that the image was licensed and that it did not infringe "any patent, copyright or other industrial or intellectual property right or contractual right or obligations of any third party."

Corel, naming the image "medalert.eps," first sent it into the public domain as part of CorelDRAW 4, in May 1993. In 1994, Corel deleted the words "MEDIC" and "ALERT" from the medalert.eps graphic, and software products produced from that time forward used the second, wordless image only. Thus, this second image ("second disputed image") consists of a caduceus above a cross-like symbol (once associated with the American Medical Association), depicted inside a circular pendant. In all, Corel has distributed eighteen software products that at some point contained one of the two versions of the clipart images. At no point have the images appeared on any Corel packaging or in any Corel advertising, all of which prominently displays Corel's name.*fn1

Medic Alert, through its attorneys, first notified Corel of the alleged infringement of Medic Alert's trademark in September 1996. Corel immediately contacted TechPool, which attempted to gain licensing permission from Medic Alert. When this effort failed, in January 1997, Corel identified the medalert.eps image as one that should be removed whenever the opportunity for "remastering" arose. Remastering is a process by which changes are made to an existing version of a software product between inventory runs. This remastering took place from January 1997 to June 1997. As of November 1998, all Corel software that ever contained the medalert.eps image is either no longer being shipped or has been remastered to exclude the image altogether. Because it doesn't track this information, Corel is not sure if any units of software in Corel's inventory contain the disputed images. A consumer bought software with one of the disputed images in it at a retail store in March 1998.

There is evidence of the commercial use of one of the disputed images by a company called Tabak's Health Products ("Tabak's"), which altered the image to read "Health Alert" and placed it on its direct mail solicitation for vitamins. Several Medic Alert members have contacted Medic Alert's customer representatives by phone regarding Corel's use of clipart images that are confusingly similar to the Medic Alert marks, and two sent letters after seeing the Tabak's solicitation. These members expressed their confusion regarding whether Medic Alert had authorized or permitted Corel and/or Tabak's to use the Medic Alert marks.*fn2

Medic Alert has suffered no monetary loss as a result of Corel's inclusion of the disputed images in its software save for expenses related to this litigation and staff time devoted to the Tabak's incident. It is not aware of any effect on donations. Medic Alert has no evidence to suggest that inclusion of the disputed images assisted Corel in selling its software.

Medic Alert filed suit against Corel alleging federal trademark infringement (count I) and contributory federal trademark infringement (count II), under 15 U.S.C. § 1114; federal false designation (count III) and contributory federal false designation (count IV), under 15 U.S.C. § 1125(a); Illinois deceptive trade practices (count V), under 815 ILCS 510/2; Illinois common-law trademark infringement and unfair competition (count VI) and Illinois contributory common-law trademark infringement (count VII); federal trademark dilution (count VIII), under 15 U.S.C. § 1125(c); Illinois trademark dilution (count IX), under 765 ILCS 1035/15; and Illinois counterfeit trademark infringement (count X), under 765 ILCS 1040/2 and 1040/7. Corel moves for summary judgment on all counts.

Summary judgment is proper if, drawing all inferences in the light most favorable to the non-moving party, "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Given the fact-intensive nature of trademark infringement disputes, the Seventh Circuit has cautioned district courts to approach motions for summary judgment on these issues with great caution. See AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 616 (7th Cir. 1993).

Trademark Infringement

To prevail against Corel on its claims of trademark infringement, false designation, and deceptive trade practices, Medic Alert must show: 1) that it possesses a valid trademark, and 2) that there is a likelihood of confusion on the part of the public. See Nike, Inc. v. "Just Did It" Enterprises, 6 F.3d 1225, 1227 (7th Cir. 1993) (federal trademark infringement); Rust Env't. & Infrastructure, Inc. v. Teunissen, 131 F.3d 1210, 1213 (7th Cir. 1997) (federal false designation); AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 619 (7th Cir. 1993) (state trademark infringement and unfair competition); Juno Online Serv. v. Juno Lighting Inc., 979 F. Supp. 684, 692 (N.D.Ill. 1997) (Illinois deceptive trade practices). A trademark is not a property right, but an identifier: if there is no one who is likely to be confused by the alleged infringer, there can be no impairment of the interest that the trademark statute protects. See Libman Co. v. Vining Indus., Inc., 69 F.3d 1360, 1361 (7th Cir. 1995). Here, the parties do not dispute the validity of Medic Alert's trademark. Thus, the only question to resolve is whether Corel's inclusion of the medalert.eps graphic in its software is likely to cause confusion on the part of consumers.

Before turning to the evidence, I want to clarify the sort of confusion the law is concerned about. In short, consumer confusion as to what? Corel argues that the proper question is whether consumers looking to buy Corel products would be confused either as to their proper source (source confusion) or as to an affiliation between the parties' respective services and products that actually aided in selling Corel's products (approval confusion). Medic Alert concedes that there is no evidence of source confusion, but argues that Corel's definition of approval confusion is overly narrow. It asserts that consumers need only think that Medic Alert authorized Corel to use its trademarked symbol in creating the medalert.eps graphic or otherwise approved of its use, regardless of whether they see that use as an endorsement of Corel's products or whether Corel sales benefitted as a result.

The answer lies somewhere in between. The Lanham Act prohibits the use of any designation that is likely to cause consumer confusion "as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities by [the plaintiff]." 15 U.S.C. § 1125(a)(1). Here, the relevant confusion is whether the customer would believe that Medic Alert sponsored, endorsed or was otherwise affiliated with Corel's software. See Nike, Inc. v. "Just Did It" Enter., 6 F.3d 1225, 1228-29 (7th Cir. 1993). The approval at issue, therefore, is not whether Medic Alert approved of the use (or alleged use) of its trademarked image, but rather, whether Medic Alert approved of Corel's software. While perceived permission to use a trademarked image can amount to perceived product approval, see Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 544 (5th Cir. 1998), it does not constitute per se evidence of such, and a finding that consumers are likely to be confused about the former would not end the ultimate factual inquiry as Medic Alert suggests. In Pebble Beach, the defendant golf course operator used trademarked logos of famous golf courses in promotional materials for its own less-famous course, thereby suggesting that the famous courses had permitted use of their ...


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