NYU Langone Health System v. Northwell Health, Inc.

Background

NYU Langone Health System and NYU Langone Hospitals sued Northwell Health, Inc., alleging that Northwell copied NYU Langone’s advertising trade dress—the overall visual appearance and combination of design features used in its advertisements—to trade on NYU Langone’s goodwill and reputation. The original complaint asserted federal claims under the Lanham Act, New York statutory claims, and New York common-law claims. In an earlier ruling, the court dismissed the false-advertising claims with prejudice and dismissed the remaining claims without prejudice, allowing NYU Langone to seek permission to amend them. NYU Langone then proposed an amended complaint that revised its trade-dress claims and added trademark-related claims.

Trade-Dress Claims

The proposed amended complaint identified NYU Langone’s alleged trade dress as four features used together: a solid purple background in Pantone shade PMS 2597 or a similar shade needed for consistent appearance, white Benton Sans lettering, stacked left-aligned headlines, and periods as punctuation.

The court held that these allegations adequately identified a specific and finite trade dress. It also found that NYU Langone plausibly alleged the other required elements at the pleading stage: that the trade dress was nonfunctional, had acquired a secondary meaning, and was likely to confuse consumers. NYU Langone alleged extensive advertising expenditures, broad use of the advertising style, successful advertising campaigns, and examples of Northwell employees recognizing similarities to NYU Langone’s advertisements while Northwell allegedly continued using similar designs. The court also relied on allegations that the parties offered healthcare services in nearby markets and that Northwell acted in bad faith. The court noted that several factual issues, including some aspects of secondary meaning and likelihood of confusion, were more appropriate for later resolution, such as at summary judgment.

The court found no undue delay or unfair prejudice from allowing the trade-dress amendments. It therefore granted NYU Langone’s motion for leave to amend as to the trade-dress claims, including related federal and New York unfair-competition and false-designation claims.

Trademark Claims

The proposed amended complaint also claimed that NYU Langone had an unregistered trademark in the color purple as used in connection with healthcare services in New York. The proposed claims included federal trademark infringement, federal unfair competition and false designation of origin, New York trademark dilution, common-law trademark infringement, and common-law unfair competition.

The court explained that a color can sometimes function as a protected trademark when used in a specific context to identify the source of goods or services. But the court held that NYU Langone had not adequately alleged a protectable trademark in purple covering the wide range of uses described in the proposed complaint, including signage, websites, social-media posts, brochures, scrubs, event lighting, and gift-shop items. The court concluded that the proposed trademark claims were inadequately pleaded and that adding them would be futile. It therefore denied leave to amend as to those claims.

Disposition

The conclusion states that NYU Langone’s motion for leave to amend was GRANTED IN PART and DENIED IN PART. NYU Langone was ordered to file an amended complaint containing only the trade-dress claims by October 11, 2024. The court also ordered Northwell to show cause by October 4, 2024, why any portion of the opinion should remain sealed and to submit proposed redactions. The clerk was directed to file the opinion under seal and terminate the open motion.

Sealing and Textual Inconsistency

The opinion says that it was filed under seal because it discussed portions of the proposed amended complaint that were redacted from the public filing. One sentence in the discussion appears to say that leave to amend the “Trade Dress Claims” was denied after the court found the “Trademark Claims” futile. That sentence conflicts with the surrounding analysis and the conclusion, both of which state that leave was granted for the Trade Dress Claims and denied for the Trademark Claims.