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The Management Group, LLC v. T&G Consultant Agency, LLC

United States District Court, W.D. Wisconsin

July 12, 2016

THE MANAGEMENT GROUP, LLC, Plaintiff,
v.
T&G CONSULTANT AGENCY, LLC, Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY DISTRICT JUDGE.

         Plaintiff The Management Group, LLC, operating under the tradename “TMG” asserts Lanham Act and Wisconsin common law claims of trademark infringement against defendant T&G Consultant Agency, LLC, and seeks a preliminary injunction to bar defendant from using an infringing trademark. Plaintiff initiated this lawsuit and filed the motion for preliminary injunction based on the Wisconsin Department of Health Services’ recent certification of defendant as a consultant agency in the same market (indeed, the same program) in which TMG competes. The court held a hearing on plaintiff’s motion for preliminary injunction on July 11, 2016, at which the parties appeared personally and by counsel. For the reasons set forth at yesterday’s hearing and that follow, the court will grant plaintiff’s motion in part, require the posting of a bond and expedite the trial of this case.

         FACTS

         A. The Parties

         Plaintiff The Management Group, LLC, which uses the tradename TMG, is a Wisconsin limited liability company that counsels and serves individuals who participate in the “Include Respect I Self-Direct” (“IRIS”) Medicaid waiver program administered by the Wisconsin Department of Health Services (“DHS”) through Wisconsin, Aging & Disability Resource Centers (“ADRCs”). TMG is a certified “IRIS Consultant Agency” (“ICA”). TMG has operated since at least January 1, 1987, under the TMG tradename. TMG’s domain name is tmgwisconsin.com.

         On March 12, 2015, Gene Shikhman organized two limited liability companies in the State of Wisconsin -- A&C Management Group LLC and defendant T&G Consultant Agency LLC. A&C Management was organized for the purpose of applying to DHS for certification as an IRIS Fiscal Employer Agent, and T&G Consultants was organized for the purpose of applying to the Wisconsin Department of Health 2 Services for certification as an IRIS Consultant Agency. Plaintiff refers to defendant as “T&G, ” whereas defendant refers to itself as “T&G Consultants, ” representing that the latter form is the only way T&G Consultants holds itself out to DHS and the market for IRIS services. The court will refer to defendant as “T&G Consultants, ” but will address below plaintiff’s concern of defendant’s use of the shortened name “T&G.”

         Shikhman explained that A&C Management is named after the first letters of the first names of his children (Aiden and Chloe), and T&G Consultants is named after the first letters of the middle names of his children (Tyler and Giselle). T&G Consultants’ domain name is iristandgwi.org. On June 30, 2016, T&G Consultants was certified by DHS to begin doing business as a certified ICA as of Monday, July 11, 2016.

         B. The Market

         From the inception of the IRIS program in 2008 until very recently, TMG has been the only certified ICA operating in the state of Wisconsin. During the hearing, counsel for plaintiff described one other current ICA and another company (in addition to defendant) that is about to commence business as a certified ICA, which means that there will be a total of four competitors in this market.

         ADRCs are responsible for providing new or existing IRIS participants with “options 6 counseling” -- i.e., counseling meant to inform people about their choices, including choice of ICA. ADRCs are currently administered directly by DHS through contracts with individual counties, in an effort to ensure adequate oversight and neutrality of referral information. TMG represents -- and T&G Consultants does not dispute -- that it has no control over how ADRCs are trained or do their work. In counseling IRIS participants, ADRCs receive brochures supplied directly by certified ICAs, which are then offered to participants. (See Jensen Decl., Ex. C (dkt. #14-3) (TMG brochure).) ADRCs also rely on a chart prepared by DHS, which offers very basic information about each certified ICA or provider. (See id., Ex. B (dkt. #14-2) (IRIS options chart from Milwaukee).)

         Plaintiff maintains that ADRCs were to receive updated charts listing current certified provider choices on July 8, 2016, and these charts were to include both TMG and T&G Consultants as ICA options within the IRIS program. T&G Consultants contends that it “anticipates” being identified as “T&G Consultants” on the chart. (Def.’s Resp. to Pl.’s PFOFs (dkt. #19) ¶ 29.) Moreover, DHS has indicated that the IRIS website will be updated on July 11 to include T&G Consultants, though T&G Consultants again clarifies that it will be listed as “T&G Consultants.” In addition to ADRCs enrolling new participants, DHS also send out a letter several times a year to existing IRIS participants, informing them of all available ICAs and advises the participants of their right to choose the provider they prefer.

         For purposes of this motion, the parties concede that the services they offer are identical. TMG is a certified ICA by DHS, and defendant was recently certified as an ICA and anticipates commencing business soon. The parties, however, dispute (1) the level of sophistication of the IRIS participants, (2) whether the participants primarily learn about the ICAs through word-of-mouth, (3) whether that information allows participants to distinguish between the various ICAs, and (4) the likelihood of participants confusing the company names over time in a manner that may dilute plaintiff’s brand equity.

         C. The Mark

         TMG contends that its success in meeting the needs of enrollees or participants in the IRIS program is due “in large part due to TMG’s longstanding and hard-earned goodwill in its name and the TMG mark.” (Pl.’s PFOFs (dkt. #13) ¶ 8.) TMG further contends that the “positive reputation of TMG's name and mark has been carefully established through the creation and maintenance of partnerships and goodwill between TMG, IRIS participants, care providers, and DHS since the inception of the IRIS program.” (Id. at ¶ 9.)

         On November 6, 2015, plaintiff filed an application for the trademark “TMG.” (Polakowski Decl., Ex. A (dkt. #6-1) (Serial No. 86/821, 846).) That application is still pending. Previously, on March 5, 2014, plaintiff registered a “TMG” trademark in Wisconsin as shown below:

         (Image Omitted.)

(Polakowski Decl., Ex. B (dkt. #6-2) (application dated 4/13/11); id., Ex. C (registration provided 3/5/14).) The TMG mark used in plaintiff’s current brochure, though, is different from that registered:

         (Image Omitted.)

(Jensen Decl., Ex. C (dkt. #14-3).) TMG’s use of the “TMG” name in commerce and as a certified ICA predates any of defendant’s uses of T&G Consultants by at least seven years.

         D. Procedural Posture

         In November 2015 and again in January 2016, plaintiff’s counsel wrote letters to defendant and its counsel that objected to the use of T&G Consultants in its name. (Polakowski Decl., Exs. G, H (dkt. ##14-7, 14-8).) T&G Consultants acknowledged receipt of the November correspondence by letter dated December 17, 2015, and declared its intention to continue using the T&G name regardless of TMG’s objections. (id., Ex. I (dkt. #14-9).)

         Given DHS’s elaborate certification process and role of its ADRCs in marketing ICAs, the court inquired at the status conference as to DHS’s role or position in this dispute. Plaintiff maintains that DHS has indicated to TMG that the name of an ICA is not a part of its certification criteria. A review of the IRIS Consultant Agency Certification Criteria confirms that nothing in the certification criteria makes issuance of the certification dependent upon maintenance of an entity’s name. In its response, defendant submitted an email dated July 5, 2016, purportedly from Jody Brassfield, identified in her email signature as the Section Chief, Office of IRIS Management, Bureau Long Term Care Financing, Division of Long Term Care / DHS, to Renee Mueller, who has an email address of tandgconsultingreneem@gmail.com, stating that “DHS is not going to get involved in this matter, ” but “[b]y default if DHS had an issue with the name we would not have certified you under the name T & G Consultants or at least enter into negotiations requesting a change. Since neither happened and you will be certified under that name[, ] I think that demonstrates we have no issue with it.” (Shikhman Decl., Ex. 7 (dkt. #21-7).)

         Plaintiff filed this lawsuit on July 1, 2016, along with a motion for a temporary restraining order and a motion for preliminary injunction.

         OPINION

         I. Standard of Review of Motion for Preliminary Injunction

         To obtain a preliminary injunction, “a party must show that it has (1) no adequate remedy at law and will suffer irreparable harm if a preliminary injunction is denied and (2) some likelihood of success on the merits.” Am. Civil Liberties Union of Ill. v. Alvarez, 679 F.3d 583, 589 (7th Cir. 2012) (quoting Ezell v. City of Chi., 651 F.3d 684, 694 (7th Cir. 2011) (internal quotations omitted)). If the moving party makes this initial showing, then “the court weighs the factors against one another, assessing whether the balance of harms ...


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