Physicians Health Plan, Inc.v.Michigan HMO Plans, Inc.

Trademark Trial and Appeal Board

Oct 5, 1999

No. 92025559 (T.T.A.B. Oct. 5, 1999)

Hearing: Paper No. 33
November 12, 1998 BAC
THIS DISPOSITION IS NOT CITABLE AS PRECEDENT
OF THE TTAB OCT. 5, 99
U.S. DEPARTMENT OF COMMERCE
PATENT AND TRADEMARK OFFICE
_____
Trademark Trial and Appeal Board
_____
Physicians Health Plan, Inc.
v.
Michigan HMO Plans, Inc., dba Omnicare Health Plan
_____
Cancellation No. 25,559
_____
Steven H. Lasher and David H. Aldrich of Foster, Swift,
Collins & Smith, P.C. for Physicians Health Plan, Inc.
Glenn E. Forbis of Rader, Fishman & Grauer, PLLC for
Michigan HMO Plans, Inc., dba Omnicare Health Plan.
_____
Before Cissel, Hohein and Chapman, Administrative Trademark
Judges.
Opinion by Chapman, Administrative Trademark Judge:
Physicians Health Plan, Inc. has filed a petition to
cancel a registration issued to Michigan HMO Plans, Inc.,
dba Omnicare Health Plan, for the mark shown below
Cancellation No. 25559
2
for “health care services in the nature of a health
maintenance organization.”1
Petitioner asserts as grounds for cancellation that it
is a licensed health maintenance organization; that since at
least as early as August 14, 1986, petitioner has
continuously used a butterfly design for the underwriting of
health and accident insurance, which includes providing
health care services through a health maintenance
organization; that petitioner uses its mark pursuant to a
1987 license agreement with Medica; that Medica is the owner
of a registration2 for the mark shown below
for “underwriting of health and accident insurance”; and
that respondent’s mark, when used in connection with its
services, so resembles petitioner’s previously used mark as

1 Registration No. 1,658,585, issued September 24, 1991, Section
8 affidavit accepted. The claimed date of first use and first
use in commerce is September 1, 1988. The registration includes
the following statement: “The stippling is a feature of the mark
and does not indicate color.”
2 Registration No. 1,469,371, issued December 15, 1987, Section 8
affidavit accepted, Section 15 affidavit acknowledged. The
claimed date of first use and first use in commerce is August 14,
1986.
Cancellation No. 25559
3
to be likely to cause confusion, mistake, or deception.
In its amended answer respondent denied the salient
allegations of the petition to cancel, and raised the
affirmative defenses that “petitioner’s claim is barred
under the doctrine of laches and estoppel.”3
The record includes the pleadings, and the file of
respondent’s registration. Petitioner also submitted a
notice of reliance on (i) status and title copies of pleaded
Registration No. 1,469,371 owned by Medica (petitioner’s
licensor), and Registration No. 1,435,999 owned by
Physicians Health Plan of Minnesota4, and (ii) a copy of the
March 3, 1987 license agreement between Physicians of
Minnesota and petitioner; the testimony (with exhibits) of
Olga Dazzo, chief executive officer and president of
petitioner’s mid-Michigan subsidiary; the testimony (with
exhibits) of Susan Kay Sharkey, chief executive officer of
petitioner’s south Michigan subsidiary; the testimony (with
exhibits) of Michelle Ann Connell, petitioner’s sales
administrative director; the testimony (with exhibits) of

3 Such allegation is a legally insufficient pleading of the
affirmative defenses of laches and estoppel because it includes
no facts on which the defenses are based. However, inasmuch as
both parties argued the affirmative defenses in their briefs on
the case, the Board will consider these defenses.
4 Registration No. 1,435,999, issued April 7, 1987, for
“comprehensive health care services,” Section 8 affidavit
accepted, Section 15 affidavit acknowledged. The mark is exactly
the same as the butterfly shown in pleaded Registration No.
1,469,371, except that the butterfly is not at a tilted angle.
The claimed date of first use and first use in commerce is
January 2, 1985.
Cancellation No. 25559
4
Dennis Pace, president of Pace & Partners, petitioner’s
advertising agency; and the testimony (with exhibits) of
John Bunge, president of Legal Marketing Research
Incorporated, hired by petitioner to conduct a survey.
Respondent submitted the testimony (with exhibits) of
Solomon C. Payne, II, manager of marketing communications of
United American Health Care Corporation (the management
company that oversees respondent’s health plan); and a
notice of reliance on (i) the depositions of Susan Kay
Sharkey,5 Olga Dazzo, Michelle Connell, and Dennis Pace,6
and (ii) copies of ten third-party registrations of
butterfly marks.
Both parties filed briefs on the case, and were
represented at an oral hearing held before this Board on
November 12, 1998.
The record shows that petitioner is a health
maintenance organization (HMO) which provides health benefit
services in Michigan through four regional subsidiaries, and
that it plans to expand to the southeast Michigan area.
Petitioner first used and has continuously used its

5 The Sharkey transcript submitted by respondent (item “d.” in
respondent’s notice and amended notice of reliance) was a copy of
the Sharkey deposition previously submitted by petitioner.
6 The copies of all four deposition transcripts were submitted by
respondent in an inappropriate format. Specifically, there were
four pages of testimony per one letter-size page. This is not
acceptable as all transcripts are to be filed with the Board in
the format of one page of testimony per one letter-size page.
See, e.g., Trademark Rule 2.123(g)(1), which relates to trial
transcripts.
Cancellation No. 25559
5
butterfly mark (a graphic representation of a butterfly
which also may be viewed as a heart and two faces) since
August 1, 1985; and petitioner entered into a license
agreement with Physicians of Minnesota (now Medica) in 1987.
Petitioner sometimes uses its butterfly mark physically
separate from the words “Physicians Health Plan,” but
petitioner stipulated that “at least in terms” of
petitioner’s documents introduced at the Dazzo deposition,
petitioner’s butterfly design is not used alone without
reference to “Physicians Health Plan” on the same page.
(Dazzo dep., p. 48.)
Petitioner intended its butterfly mark to evoke ideas
of growth, transition, creativity, the notion of freedom and
the concept of choice of physicians. The faces and heart
are intended to connote compassion, empathy, and the
relationships of trust between the plan provider, its
members and the physician providers.
Petitioner’s group health benefit services are
primarily sold to employer groups, including governmental
employers. A small percentage (about 10%, including
Medicaid) of petitioner’s business is with individuals.
Petitioner currently offers a Medicaid service (administered
by the state of Michigan), and it is developing a Medicare
service (administered by the federal government).
Petitioner focuses its sales efforts on both employer group
Cancellation No. 25559
6
personnel who decide which plan(s) will be offered by that
employer, and on the potential members individually.
Petitioner advertises its services through local
magazines and newspapers, direct mailings, outdoor
billboards and on television. The total annual advertising
budget for petitioner for the last few years has been
approximately $700,000 - $800,000.
Respondent is also a managed care health maintenance
organization which organizes and manages health care
services provided by doctors and other providers in its
network. Respondent offers its services in southeastern
Michigan to employers and to individuals through Medicaid.
Respondent first used its butterfly mark (a realistic
representation of a butterfly) in 1988, and has continued to
the present using its butterfly mark in the same form.
In adopting its butterfly mark, respondent intended to
suggest the ideas of springtime, light, femininity, beauty,
freedom, and the ability of a butterfly to adapt to changing
conditions.
Respondent’s target audience originally was “females 25
to 49 and black females 18 to 49” but the audience has now
evolved to “black females 25-49.” (Payne dep., p. 12).
Respondent advertises in southeastern counties in Michigan,
and it has preliminarily studied expansion into other
counties. Respondent advertises mostly through television;
Cancellation No. 25559
7
but it also advertises on radio, in business to business
print advertisements, in consumer print advertisements such
as magazines and newspapers, and on outdoor billboards.
Respondent’s total advertising costs since 1988 were
approximately $18 - $20 million.
The record clearly establishes petitioner’s priority of
use of its butterfly mark. Petitioner first used its
butterfly mark in August 1985, which is three years prior to
respondent’s first use of its butterfly mark.
We turn then to the issue of likelihood of confusion.
Our determination of this issue is based on an analysis of
all the probative facts in evidence that are relevant to the
factors bearing on likelihood of confusion. See In re E. I.
du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA
1973).
Both parties provide health maintenance organization
services, and both offer their services to group employers
(i.e., companies and other entities that offer health
benefit plan(s) to their employees) as well as to Medicaid
recipients. (See, e.g., petitioner’s Exhibit No. 6, a
“1988-89 HMO Open Enrollment” book for “State of Michigan
Employees.” Respondent is listed therein as benefit plan
number 15 and petitioner appears on the next page as benefit
Cancellation No. 25559
8
plan numbers 17-20.)7 In fact, respondent concedes that the
parties “both provide HMO services” and that they “market
their services to similar customers.” (Brief, p. 15).
Until recently, petitioner and respondent offered their
services in separate areas of Michigan, but both parties are
expanding from the counties in which they traditionally sold
their services. It is clear that petitioner and respondent
offer the same services to the same purchasers through the
same channels of trade.
Respondent argues that because purchasers select an HMO
(typically for at least a one-year period) with a high
degree of care and the services are generally purchased by
professional or sophisticated buyers, confusion is “less
likely.” (Brief, p. 15). We agree that both tiers of
purchasers, the business personnel selecting one or more
plans to be offered to company employees, as well as the
individuals selecting a particular HMO, generally consider
their choice of health care providers carefully, and that it
is an important decision.
Even assuming that the purchasers and users of the
services in question are sophisticated, and/or are very
deliberate in the decision making process as to health
benefits, they are still likely to be confused as to the

7 We note that on the two pages featuring respondent in this
enrollment book, there is no butterfly design mark. Rather,
Cancellation No. 25559
9
source of two such services when both are identified by
similar butterfly designs. That is, such purchasers and
users are not immune from confusion as to the origin of the
respective services, especially when sold under very similar
marks. See Weiss Associates Inc. v. HRL Associates Inc.,
902 F.2d 1546, 14 USPQ2d 1840 (Fed. Cir. 1990); Aries
Systems Corp. v. World Book Inc., 23 USPQ2d 1742, footnote
17 (TTAB 1992); In re Pellerin Milnor Corporation, 221 USPQ
558 (TTAB 1984); and Aerojet-General Corporation v. American
Standard, Inc., 171 USPQ 439 (TTAB 1971).
Turning next to a consideration of the marks,8 the
similarity or dissimilarity of marks in appearance and
commercial impression ultimately comes down to the “eyeball
test.” This is explained by J. Thomas McCarthy, at 2
McCarthy, McCarthy on Trademarks and Unfair Competition,
§23:25 (4th ed. 1999) as follows (footnote omitted):
Because a picture is worth a
thousand words, there is little in the
way of guidelines to determine the
degree of visual similarity which will
cause a likelihood of confusion of
buyers. Obviously, for picture and
design marks (as opposed to word marks),
similarity of appearance is controlling.
There is no point in launching into a
long analysis of the judicial pros and

respondent is identified by “OmnicCare Health Plan” and a circle
design with lines through it.
8 We should point out that the marks involved before us are those
as registered, i.e., the butterfly designs standing alone and not
including the words ‘Physicians Health Plan’ as used with
petitioner’s butterfly design mark, and ‘OmniCare Health Plan’ as
used with respondent’s butterfly design mark.
Cancellation No. 25559
10
cons regarding visual similarity of
marks. Regarding visual similarity, all
one can say is ‘I know it when I see
it.’”
There is no evidence of record to indicate that a
butterfly design is anything other than arbitrary in
relation to providing health maintenance organization
services. The design of a butterfly carries the same
connotation for both parties.
While it is true that upon close inspection,
petitioner’s butterfly mark includes a heart and two faces,
nonetheless, there is no doubt that the overall impression
and perception of petitioner’s design is that of a
butterfly. That is, even though one design is a realistic
depiction of a butterfly and the other is a more abstract
graphic representation of a butterfly, both designs are
clearly butterflies and would be so perceived by purchasers.
The differences are not likely to be recalled by purchasers
seeing the marks at separate times. The emphasis in
determining likelihood of confusion is not on a side-by-side
comparison of the marks, but rather must be on the
recollection of the average purchaser, who normally retains
a general, rather than a specific, impression of the many
trademarks encountered. Further, the purchaser’s
fallibility of memory over a period of time must also be
kept in mind. See Grandpa Pidgeon’s of Missouri, Inc. v.
Borgsmiller, 477 F.2d 586, 177 USPQ 573 (CCPA 1973); In re
Cancellation No. 25559
11
Mucky Duck Mustard Co., Inc., 6 USPQ2d 1467 (TTAB 1988); and
Edison Brothers Stores v. Brutting E.B. Sport-International,
230 USPQ 530 (TTAB 1986).
These two butterfly design marks are sufficiently
similar in appearance and commercial impression that when
they are used in connection with the services set forth in
petitioner’s licensor’s registration and respondent’s
registration, consumers are likely to be confused. See
Kangol Ltd. v. KangaROOS U.S.A. Inc., 974 F.2d 161, 23
USPQ2d 1945 (Fed. Cir. 1992); In re Calgon Corp., 435 F.2d
596, 168 USPQ 278 (CCPA 1971); and Puma-Sportschufabrieken
Rudolf Dassler KG v. Garan, Inc., 224 USPQ 1064 (TTAB 1984).
Cf., e.g., Lacoste Alligator S.A. v. Everlast World’s Boxing
Headquearters Corporation, 204 USPQ 945 (TTAB 1979).
This is especially true in this case, where the parties
use their marks on identical services, which are sold to the
same purchasers through the same channels of trade. “Where
the goods and services are directly competitive, the degree
of similarity required to prove a likelihood of confusion is
less than in the case of dissimilar products.” 3 J.
McCarthy, McCarthy on Trademarks and Unfair Competition,
§23:20.1 (4th ed. 1999). See also, Century 21 Real Estate
Corp. v. Century Life of America, 970 F.2d 874, 23 USPQ2d
1698, 1700 (Fed. Cir. 1992).
Cancellation No. 25559
12
Respondent has introduced ten third-party
registrations for marks which either consist of or include
butterfly designs, and all are for services generally in
the very broad field of health care (including services
identified as therapeutic massage, physical therapy,
dentistry, gynecological treatment services, and laser
cosmetic surgery). None of the third-party registrations
is specifically for health maintenance organization
services. In any event, because third-party registrations
are not evidence of use of the marks shown therein, or that
the public is familiar with them, the third-party
registrations of record have been accorded little weight in
our determination of likelihood of confusion. See Helene
Curtis Industries, Inc. v. Suave Shoe Corp., 13 USPQ2d 1618
(TTAB 1989).
Petitioner submitted the testimony, as well as a
report, from John Bunge, petitioner’s survey expert. In
his report and in his testimony, Mr. Bunge stated that the
survey, which his company conducted on behalf of
petitioner, showed that 22.1% of the respondents believed
that the two advertisements they were shown (one for
petitioner and one for respondent) were for the same or
associated companies because of the use of the butterfly
design marks on them. Respondent has thoroughly criticized
the survey as to its design, implementation, interpretation
Cancellation No. 25559
13
and analysis; and argues that the survey is entitled to no
evidentiary weight. We need not reach this issue because
we find a likelihood of confusion without relying on
consideration of petitioner’s survey.9
Respondent also contends that the absence of actual
confusion in several years of coexistence of the marks in
the marketplace compels a finding of no likelihood of
confusion. We disagree. First, as acknowledged by
respondent, proof of actual confusion is not necessary.
Rather, the test “is a practical likelihood of confusion
which would damage the [plaintiff].” See Kangol Ltd., supra
at 1946. Second, the record clearly shows that while only
the respective butterfly designs are at issue before us,
both parties use the names of their health plan (Physicians
or OmniCare) in conjunction with the respective butterfly
designs. This fact alone could account for the lack of
reported instances of actual confusion.
Petitioner additionally argues that respondent’s
intent in selecting its butterfly design mark was to derive
a benefit from petitioner’s reputation. However, there is

9 Surveys are not required in Board proceedings. As the Board
has noted, “We appreciate the significant financial cost of
surveys. Moreover, we obviously recognize the limited
jurisdictional nature of Board proceedings, wherein only rights
to registrability, not use, are determined.” See Hilson Research
Inc. v. Society for Human Resource Management, 27 USPQ2d 1423,
1435-1436 (TTAB 1993).
Cancellation No. 25559
14
no evidence of record to support this assertion, and hence
we find no such questionable intent on respondent’s part.
We find that, based upon a consideration of all
relevant du Pont factors, confusion as to source is likely
between respondent’s butterfly mark and petitioner’s
previously used butterfly mark, when these marks are used in
connection with the identical services offered by these
parties.
This brings us, finally, to respondent’s affirmative
defense that petitioner’s claim is “barred under the
doctrine of laches and estoppel”.10 The burden of proof is
on respondent to establish its affirmative defenses. When
considering laches in a cancellation proceeding, Professor
McCarthy has explained that (footnotes omitted):
[L]aches is not an absolute time
limit like a statute of limitations. It
is an equitable defense measured by delay
weighed against the resulting prejudice
to the registrant. A mere long period of
time between petitioner’s actual or
constructive notice of registrant’s use
and the date of filing of petitioner’s
request for cancellation is not alone
sufficient to constitute laches. Laches
is a product of delay times prejudice to
registrant resulting from the delay.
3 J. McCarthy, McCarthy on Trademarks and Unfair
Competition, §20:76 (4th ed. 1999).
Our primary reviewing court has held that with regard
Cancellation No. 25559
15
to the registration process, laches starts to run from the

10 For a discussion of the elements of the separate defenses of
laches and estoppel, see A. C. Auckerman Co. v. R. L. Chaides
Construction Co., 960 F.2d 1020, 22 USPQ2d 1321 (Fed. Cir. 1992).
Cancellation No. 25559
16
date when the registrant’s application was published for
opposition, which in this case was July 2, 1991. See
National Cable Television Association Inc. v. American
Cinema Editors Inc., 937 F.2d 1572, 19 USPQ2d 1424 (Fed.
Cir. 1991). Petitioner’s delay from July 1991 to September
1996, when it filed this petition to cancel, does not, by
itself, constitute an unreasonable and inexcusable length of
time sufficient to establish laches. Moreover, petitioner’s
witness, Olga Dazzo (CEO and president of petitioner’s mid-
Michigan subsidiary), testified that the actual date when
she became aware that respondent had changed its logo to a
butterfly was “shortly after April of ’96.” (Dep., p. 24).
Respondent’s witness, Solomon C. Payne, II did testify that
respondent has spent millions of dollars over ten years
marketing it health plan11, but respondent did not submit
evidence of any reliance on petitioner’s silence and
prejudice resulting therefrom. Respondent’s defense of
laches therefore must fail. See Charrette Corp. v. Bowater
Communication Papers Inc., 13 USPQ2d 2040, 2043 (TTAB 1989).
The defense of equitable estoppel focuses on acts of
commission by the plaintiff reasonably inducing the
defendant to believe that its activity was acceptable to the
plaintiff, and detrimental reliance by the defendant on that

11 Mr. Payne’s testimony does not specify whether these
advertising expenses are for the butterfly design, or the
“OmniCare” mark, or both.
Cancellation No. 25559
17
belief. See Lincoln Logs Ltd. v. Lincoln Pre-Cut Log Homes
Inc., 971 F.2d 732, 23 USPQ2d 1701 (Fed. Cir. 1992).
Respondent has submitted no such proof (and in fact,
respondent did not even argue that petitioner committed
overt acts leading respondent to believe that petitioner did
not object to respondent’s use of the butterfly mark), and
thus, respondent has not established the defense of
estoppel.
Decision: The petition to cancel is granted, and
Registration No. 1,658,585 will be cancelled in due course.
R. F. Cissel
G. D. Hohein
B. A. Chapman
Administrative Trademark
Judges, Trademark Trial and
Appeal Board