Therma-Scan v. Thermoscan

Citation: Therma-Scan Inc. v. Thermoscan, Inc., 295 F.3d 623 (6th Cir. 2002)(full-text).

Factual Background
Therma-Scan Inc. (TSI) performs infrared thermal-imaging examinations of the human body. After analyzing the resulting images, TSI prepares diagnostic reports that are provided to its clients or their physicians. Most of TSI’s clients are residents of Detroit, Michigan. In 1988, TSI registered “Therma-Scan” as a trademark with the U.S. Patent and Trademark Office.

Thermoscan, a George corporation, began manufacturing hand-held electronic ear thermometers in March of 1989. In November of 1989, Thermoscan filed an application to register “Thermoscan” as a trademark for use on its thermometers. It began using the trademark on its thermometers in 1990, prior to the completion of the trademark registration process. The U.S. Patent and Trademark Office accepted Thermoscan’s application and published it for opposition in January of 1991.

In October of 1992, TSI’s attorney informed the president of TSI that Thermoscan was using the “Thermoscan” trademark on its thermometers. The attorney recommended that TSI take action against Thermoscan for infringement of the Therma-Scan trademark. In December of 1993, the president of TSI became concerned that Thermoscan’s use of the Thermoscan trademark might create confusion with TSI’s services when he saw the thermometer being sold in drugstores and being advertised in magazines and on television. In September of 1996, TSI commenced a proceeding in the U.S. Patent and Trademark Office to cancel Thermoscan’s registration. TSI’ cancellation proceeding was suspended to await the outcome of the lawsuit.

Trial Court Proceedings
In January of 1998, TSI brought an action for trademark infringement and unfair competition against Thermoscan seeking monetary damages, injunctive relief, and cancellation of the allegedly infringing trademark.

Thermoscan filed a motion for summary judgment in October of 1998. The district court conducted a hearing on the motion several months later. During oral argument, the parties reached a settlement. The district court then summarized for the record the understanding between the parties with respect to the settlement. Despite this development, the parties were unable to agree on the specific terms of their purported agreement in subsequent discussions. Thermoscan then filed a motion to enforce the settlement or, in the alternative, for a ruling on its motion for summary judgment. The district court granted the motion to enforce the settlement agreement as drafted by Thermoscan and dismissed the lawsuit with prejudice.

TSI appealed the district court’s order. The appellate court reversed and remanded the case, concluding that “it was an abuse of discretion for the court to impose Thermoscan’s version of the settlement upon TSI.”

The district court allowed the parties to file supplemental briefs on the motion for summary judgment after the remand. In October of 2000, the court granted Thermoscan’s motion for summary judgment and entered judgment against TSI.

Appellate Court Proceedings
TSI appealed. The appellate court held that in order to prevail on its trademark infringement and unfair competition claims, TSI must establish that Thermoscan’s trademark creates a likelihood of confusion regarding the origin of the goods or services offered by TSI and Thermoscan.

The appellate court identified eight factors that are relevant in determining whether a likelihood of confusion exists: (1) the strength of the plaintiff’s mark, (2) the relatedness of the goods or services offered by the plaintiff and the defendant, (3) the similarity of the marks, (4) any evidence of actual confusion, (5) the marketing channels used by the parties, (6) the probable degree of purchaser care and sophistication, (7) the defendant’s intent in selecting its mark, and (8) the likelihood of either party expanding its product line using the marks.

However, the appellate court admitted that not all of these factors will be relevant in every case, and in the court of applying them the most important question is whether consumers are likely to believe that the products or services offered by the parties are affiliated in some way.

In weighing the factors relevant to a determination of whether a likelihood of confusion existed, the appellate court held that the similarity between the trademarks provided the strongest support for infringement. Three other factors marginally supported a finding of likelihood of confusion. However, the two factors with the most relevance in these circumstances &mdash; the relatedness of the goods and services and the marketing channels used &mdash; both weighed strongly against finding a likelihood of confusion. Therefore, the court concluded that the district court was not wrong in granting the manufacturer’s motion for summary judgment.