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Epic Systems Corp. v. Yourcareuniverse, Inc.

United States District Court, W.D. Wisconsin

March 22, 2017

EPIC SYSTEMS CORPORATION, Plaintiff,
v.
YOURCAREUNIVERSE, INC., MEDHOST OF TENNESSEE, INC., and MEDHOST DIRECT, INC., Defendants.

          OPINION & ORDER

          JAMES D. PETERSON District Judge

         Plaintiff Epic Systems Corporation is suing defendants YourCareUniverse, Inc., MEDHOST of Tennessee, Inc., and MEDHOST Direct, Inc. under both state and federal law on the grounds that defendants' YOURCAREEVERYWHERE mark infringes Epic's trademark for CARE EVERYWHERE and results in unfair competition. Defendants have moved for summary judgment, Dkt. 113, arguing that no reasonable jury could find that their mark is likely to confuse potential customers, which is an element of all of Epic's claims. In the alternative, defendants seek summary judgment on Epic's request under 15 U.S.C. § 1117(a) for attorney fees and enhanced damages.

         The primary fact in Epic's favor is that both marks include the same words. But nearly all the other factors governing a likelihood of confusion analysis favor defendants or are neutral. Although Epic and MEDHOST offer some of the same products, the marked products (an “interoperability” application and a health and wellness website) are very different. There is no evidence that anyone has been confused by defendants' mark and there is strong evidence that defendants did not intend to copy Epic's mark or use YOURCAREEVERYWHERE to deceive potential customers. Several other factors favor defendants as well: the marks use commonplace words; the context of defendants' mark generally makes its source clear; prospective customers generally use a great deal of care in choosing the relevant products and services; and the parties have little overlap in their customers. Even if it is assumed that potential customers associate CARE EVERYWHERE with Epic's product, the possibility of customer confusion is simply too remote and speculative to require a trial. Accordingly, the court will grant defendants motion for summary judgment, which makes it unnecessary to consider defendants' alternative argument regarding Epic's request for relief under § 1117(a).

         Several other motions are before the court as well: (1) defendants' motion to exclude the testimony of one of Epic's experts, Michael Cohen, Dkt. 118; (2) defendants' motion to strike Epic's jury demand, Dkt. 120; (3) Epic's motion to amend its damages report, Dkt. 194; and (4) defendants' motion for leave to amend their answer to assert the affirmative defense of abandonment, Dkt. 202; (5) defendants' motion to compel discovery, Dkt. 224; (6) Epic's motion for an extension of time to respond to defendants' motion to compel, Dkt. 226; and (7) Epic's motion to compel discovery, Dkt. 228.

         The court will deny all of these motions as moot. Epic did not rely on Cohen's testimony or opinions in its own proposed findings of fact. Although Epic cited Cohen's testimony a few times in responses to defendants' proposed facts, none of that testimony makes any difference to the outcome of defendants' summary judgment motion. The remaining motions have no bearing on summary judgment, so it is unnecessary to consider them.

         UNDISPUTED FACTS

         The undisputed facts are taken from the parties' proposed findings of fact and the record. The court has disregarded proposed facts that did not comply with the court's procedures. For example, when responding to the other side's proposed findings of fact, the parties often included additional facts that were not responsive to the original fact.[1] Dkt. 45, at 14 (“When a responding party disputes a proposed finding of fact, the response must be limited to those facts necessary to raise a dispute. The court will disregard any new facts that are not directly responsive to the proposed fact.”). The court also excluded vague or conclusory proposed facts and responses that did not comply with the requirement to provide “specific facts” at summary judgment.[2] Drake v. Minn. Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) (“Rule 56 demands something more specific than the bald assertion of the general truth of a particular matter[;] rather it requires affidavits that cite specific concrete facts establishing the existence of the truth of the matter asserted.").

         A. Epic Systems Corporation

         1. General background

         Plaintiff Epic Systems Corporation is a healthcare information technology vendor with about 10, 000 employees. Epic's primary product is “EpicCare, ” an electronic health records (EHR) system. Epic provides one version of its system to hospitals and another version to clinics.

         Among other things, an EHR system such as EpicCare may include medical information about a patient, allow access to evidence-based tools that healthcare providers can use to make decisions about a patient's care, and automate and streamline scheduling and billing. One purpose of an EHR system is to allow providers across more than one healthcare organization to share and exchange patient information. This sharing of digitized records across providers is sometimes called “interoperability.”

         2. CARE EVERYWHERE

         CARE EVERYWHERE is Epic's interoperability “application” used to exchange patient data between and among healthcare institutions.[3] It allows patient data to be exchanged between various end points, which include Epic facilities, non-Epic facilities, personal health records, health information exchanges, and various governmental entities.

         In May 2004, Epic applied for federal registration of CARE EVERYWHERE. In June 2005, the United States Patent and Trademark Office registered the mark. In June 2011, the USPTO accepted Epic's Section 8 and 15 application, rendering Epic's mark “incontestable.” Epic has not registered CARE EVERYWHERE in Wisconsin.

         From 2009 to 2014, Epic also used CARE EPIC and CARE ELSEWHERE in conjunction with CARE EVERYWHERE. Epic stopped using these other two marks because some had expressed confusion about the three marks. Some people referred to one or more of the marks incorrectly as “Care Anywhere” and others simply had difficulty remembering the CARE EVERYWHERE name.

         The purpose of CARE EVERYWHERE is to “help traveling patients get care regardless of where they are.” Dkt. 169, ¶ 28. The name “Care Everywhere” is meant to evoke “something to both patients and providers, which is anywhere you get your care, there can be [a] composite record of all of that care in one place. So anywhere you go, we can pull information from CARE EVERYWHERE.” Id., ¶ 29.

         CARE EVERYWHERE is part of EpicCare, which hospitals and clinics must license to have access to CARE EVERYWHERE. Along the same lines, a healthcare provider cannot gain access to CARE EVERYWHERE unless he or she works at a facility that has a license to use EpicCare. A provider using an EHR system other than Epic's must gain access to CARE EVERYWHERE through another Epic product. Epic uses the CARE EVERYWHERE mark in the context of training, installation, implementation, and maintenance related to the interoperability application.

         3. Other Epic products used with CARE EVERYWHERE

         CARE EVERYWHERE's interoperability application may be used “in connection with” individual modules that are also part of EpicCare, including a personal health record management tool, clinical and administrative modules used by healthcare professionals, and a population health management system. Dkt. 170, ¶ 23. One of the modules is an application called MyChart, which is a “shared patient record” or “patient portal.” MyChart “offers patients personalized and secure online access to portions of their medical records and permits patients to include and share with providers disease/health and wellness information.” Dkt. 170, ¶ 32. MyChart permits patients to review their test results and visit summaries, schedule appointments, download records, and communicate directly with their physicians. MyChart is available only to patients of healthcare providers who are affiliated with Epic. Within the past three years, CARE EVERYWHERE “functionality” was added to MyChart. This allows for the exchange of records with a different provider. A patient may see the CARE EVERYWHERE logo in MyChart when using this functionality.

         Another module is called “Lucy, ” which allows patients to collect their records in one place. CARE EVERYWHERE allows patients using Lucy to transfer records to different providers or to a MyChart account.

         4. Customer use of CARE EVERYWHERE

         Epic allows its customers to use its marks on their consent forms and websites so long as they properly attribute the mark to Epic and otherwise use the mark appropriately. Out of 18 customers for which Epic provided defendants relevant documents, seven of those customers had used CARE EVERYWHERE incorrectly, either not attributing the mark to Epic or attributing the mark to the wrong products and services.[4] Epic relies on its employees to detect and correct customer noncompliance.

         5. Direct customers

         Epic has approximately 400 customers that obtain a license directly through Epic. The vast majority of these customers are large healthcare organizations. Other customers include “community” hospitals, retail clinics, and independent practices. Most of the smaller organizations share patients with Epic's larger customers. The smallest facility has 100 beds. Epic's direct customers are “sophisticated” and they put “a lot of care and resources” into choosing an EHR system. Dkt. 96 (Faulkner Dep., at 270); Dkt. 91 (DeVault Dep., at 222).

         The sales process often begins with a prospective customer issuing a “request for proposal” to various health IT vendors. After the customer narrows the list of vendors, those on the short list will give product demonstrations. The process for purchasing an EHR system usually lasts six months to one year. During the sales process, Epic typically interacts with high level executives and representatives of practitioners. Many of Epic's potential customers also use consultants who are familiar with and experienced in the healthcare IT industry and the request-for-proposal process. The chief information officer and other high level executives are involved in the final decision to purchase an EHR system from Epic because of the significant cost of the system, the necessary hardware to implement the system, and the training needed to use the system. The licensing fee can range from $1.5 million for a small customer to $20 million for a large customer. Because CARE EVERYWHERE is included in EpicCare, there is no separate fee for the application.

         No organization that has purchased Epic's EHR system has elected to switch to a different vendor later.

         6. Community Connect program

         For approximately 10 years, Epic has had the Community Connect program, which allows smaller hospitals and physician practices to use the Epic EHR System. Typically, Connect participants are small independent practices with one to five providers or small community hospitals with about one to 200 beds. At least 1, 500 organizations participate in the Connect program. Under the program, a Connect participant is able to use the Epic software through Epic's direct customers in the same ways that Epic's direct customers use the software. Connect participants can receive training and support from Epic.

         Generally, Connect participants have a contract with one of Epic's larger customers rather than with Epic itself. However, Epic may receive a financial benefit from Connect participants because of increased usage by the direct customer. Connect participants are ordinarily geographically near to a direct customer and share patients with that customer. Prospective Connect participants generally hear about Epic through interactions with Epic's direct customers.

         7. Epic's marketing and sales

         Epic and its CARE EVERYWHERE products and services are “widely known” in the healthcare marketplace. Dkt. 170, ¶ 46. Prospective customers “often” mention CARE EVERYWHERE as an aspect of the Epic EHR system that they have heard about and are interested in. Most people in the industry, including prospective customers, already know what CARE EVERYWHERE is when they contact Epic. However, Epic has never conducted any survey, poll, search, study, or other investigation to determine whether CARE EVERYWHERE has acquired secondary meaning in the minds of consumers.

         Epic does not have a marketing department. It does not buy advertising space or cold call potential customers. Most customers contact Epic first, often because of a recommendation from another customer. Epic promotes its products and services primarily through word of mouth and the results from rating agencies and trade shows. Epic's “Events and Design Team” promotes Epic's products and services at user group meetings and industry conferences. Since 2014, Epic has spent approximately $100 million on marketing and promotion of its products.

         Epic does have a sales team. Generally, the team responds to inquiries made from prospective customers rather than the other way around. Initial discussions are held by telephone and then may lead to face-to-face meetings. When Epic meets with a prospective customer, Epic may recommend the Community Connect program if the customer is not the appropriate size or does not have a large IT department.

         8. Patients' exposure to CARE EVERYWHERE

         Epic does not market or sell the CARE EVERYWHERE product or any other product or service to healthcare patients. Patients might see the mark when completing consent forms regarding the sharing of data, when using the MyChart patient portal, or on an Epic customer's website. When the mark appears on the MyChart portal, it appears along with the CARE EVERYWHERE logo:

         (Image Omitted)

         B. Defendants YourCareUniverse, Inc., MEDHOST of Tennessee, and MEDHOST Direct

         1. General background

         Defendant YourCareUniverse, Inc. is a subsidiary of MEDHOST Solutions Corp., which is a subsidiary of MEDHOST, Inc. YourCareUniverse “offers a range of software tools and services that assist healthcare providers in managing the business of healthcare.” Dkt. 169, ¶ 115.

         Defendant MEDHOST of Tennessee, Inc. sells an EHR system called Enterprise. Defendant MEDHOST Direct is a subsidiary that provides hosting and managed services both internally to MEDHOST affiliates and externally to customers of MEDHOST. All of these companies are “related or affiliated corporate entities.” Dkt. 160, ¶ 5.

         2. YOURCAREEVERYWHERE

         In 2013, defendants began planning for products using different marks beginning with “YourCare.” The first product, launched in February 2014, was a patient portal called YOURCARECOMMUNITY (since renamed YOURCAREHEALTH). This was followed by YOURCARELINK, which is an “interface engine” that allows the transfer of information to a state health reporting agency. By October 2014, YOURCAREEVERYWHERE was the proposed named for a health and wellness website and related services.

         After learning that yourcareeverywhere.com was an available web domain, defendants conducted a search for similar marks. Defendants discovered Epic's CARE EVERYWHERE mark at that time.

         Defendants hired an advertising agency to perform a survey to test the name YOURCAREEVERYWHERE, along with two other names. Sixty five percent of the respondents chose YOURCAREEVERYWHERE as their preferred name.

         Defendants launched the yourcareeverywhere.com website in March 2015. At the same time, they executed a marketing campaign for the website, spending approximately $2, 500, 000. When advertising products and services for YOURCAREEVERYWHERE, defendants use the YOURCAREEVERYWHERE mark. In most of the advertisements, the mark appears alongside the YOURCAREUNIVERSE mark, the MEDHOST mark, or other “YourCare” marks.

         Epic has identified two instances in which the YOURCAREEVERYWHERE mark has appeared without being clearly unaccompanied by one of defendants' other marks. Dkt. 145-65 and 145-66. (Epic cites two other documents, Dkt. 145-28 and Dkt. 145-29, but either the MEDHOST mark or numerous YOURCAREUNIVERSE marks are prominent.) One is a brochure for YOURCAREEVERYWHERE “engagement services.” (The MEDHOST mark appears at the bottom of the brochure, but it is not prominent.) The other is a press release announcing the YOURCAREEVERYWHERE website. (The YOURCAREUNIVERSE mark appears in the document, but again, it is not prominently displayed.) In both documents, the YOURCAREEVERYWHERE mark appears with a YOURCAREEVERYWHERE logo. Epic has identified three documents (two press releases and a brochure) in which the YOURCAREEVERYWHERE mark did not appear with the logo. Dkt. 169, ¶ 144. In each document without the logo, the MEDHOST mark, the YOURCAREUNIVERSE mark or both are prominent.

         In April 2015, the USPTO allowed defendants' YOURCAREEVERYWHERE mark over Epic's CARE EVERYWHERE mark.

         3. Other “YourCare” marks

         Eventually, defendants chose to brand a number of other products as part of YOURCAREUNIVERSE and identify all of them with a different “YourCare” mark. Defendants now use many other marks with the “YourCare” prefix, including the following:

• YOURCAREANALYTICS

• YOURCAREEXCHANGE

• YOURCARELINK

• YOURCAREINTERACT

• YOURCAREREFERRAL

• YOURCARENAVIGATION

• YOURCARETRANSFER

• YOURCAREWELLNESS

• YOURCAREHEALTH

• YOURCARECOMMUNITY

• YOURCAREPROVIDER

• YOURCAREKNOWLEDGE

• YOURCARESUCCESS

• YOURCAREMESSENGER

• YOURCAREDATA

• YOURCAREVISUALIZE

         The Trademark Trial and Appeal Board rejected defendant YourCareUniverse's application to register “YourCare” on the ground that it is descriptive. The board also rejected YourCareUniverse's contention that it owned a “family of marks.”

         Each of the “YourCare” products and services can be purchased separately and function independently, both as to each other and as to MEDHOST's EHR system. For example, defendants' YOURCAREEVERYWHERE website can link with any health portal, regardless whether the portal is affiliated with defendants. Defendants' YOURCAREHEALTH patient portal can be used without MEDHOST's EHR system. However, when customers of YourCareUniverse purchase products and services related to YOURCAREEVERYWHERE, they always purchase at least one of defendants' other products as well, though they are not required to do so.

         4. Products and services associated with YOURCAREEVERYWHERE

         YOURCAREEVERYWHERE is used on a free, publicly available website that contains general information related to health and wellness, such as diseases and conditions, healthcare news, pregnancy and childbirth, child and teen care, heart care, mental health, and exercise and nutrition. The mark is displayed with this logo:

         (Image Omitted)

         There is a YOURCAREEVERYWHERE mobile app as well. On the app, the mark is displayed with this logo:

         (Image Omitted)

         Users of the website or app may register for an account, which allows them to track certain health and wellness ...


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