Logo dispute between HealthPartners, Wal-Mart lands in court

It's a scrap over symbols that's a sign of the times in health care.

HealthPartners has sued retail giant Wal-Mart Stores Inc. in a dispute over whether the logo for the Bloomington-based health system is too similar to the emblem for Wal-Mart's warehouse club chain, Sam's Club.

Both groups have logos that feature overlapping tilted squares. Earlier this month, HealthPartners asked a federal court to rule that its use of the symbol does not constitute unfair competition or a trademark infringement.

Wal-Mart has not yet responded to the lawsuit in court, but a spokesman said that HealthPartners is causing confusion while infringing on the retailer's intellectual property.

Advertising executives wouldn't comment on the dispute, but said it's just another example of how retail-style marketing has become a big deal in health care.

"The retail space in health care has become so important," said John Foley, the chief executive at Level, a brand and advertising firm in Minneapolis. "The whole industry … is very concerned about protecting their brand and their image with the consumer."

Between 2011 and 2014, ad spending by hospitals, clinics and medical centers increased from roughly $1.5 billion to $2 billion, according to Kantar Media. The research firm tracked a similar increase in ad spending by health insurers during the time period, as well.

Last week, St Louis-based Ascension, one of the nation's largest nonprofit health systems, launched a more sober ad campaign to publicize its new, unified brand.

"I think insurers and providers are looking to themselves as more than just insurers and providers — they're brands," said Chris Wareham, a partner at the St. Paul creative agency boatBurner. "And they need to tell the great stories that they have."

HealthPartners is one of Minnesota's largest health insurers and also operates a large network of hospitals and clinics. Last year, the nonprofit posted operating income of $103.4 million on $5.74 billion in revenue.

Wal-Mart operates stores under its own name plus the Sam's Club brand. Based in Arkansas, the nation's largest retailer last year saw operating income of $24 billion on $482 billion in revenue.

HealthPartners declined to comment for this story. In the lawsuit, HealthPartners says that between 2011 and 2013 it merged with two other health systems in the Twin Cities area — St. Louis Park-based Park Nicollet and Lakeview Hospital in Stillwater — and hired a firm to develop a new logo.

"Combined, these elements suggest HealthPartners' relationship of care, with its patients and members in the center," the lawsuit states. "The design mark incorporates elements and colors from the three systems: the green square from HealthPartners' old logo, the purple tilted square from Park Nicollet's old logo, and the color blue from Lakeview Hospital's old logo."

HealthPartners usually uses the logo alongside its name, the lawsuit states, arguing that that's also true for Sam's Club. The U.S. Patent and Trademark Office (USPTO) reviewed the design mark applications from HealthPartners, the lawsuit claims, and found they did not conflict with any registered or pending marks.

The lawsuit summarizes correspondence between the companies through early 2016, including word of appeals to the USPTO.

In the end, the health system said it feared Sam's Club would file claims against the health system.

"Graphic logo designs depicting chevrons, overlapping or interlocking squares, and diamond shapes are extremely common and are in widespread use in the U.S., particularly within the health care and health insurance industries," the lawsuit states. "In addition, the colors blue and green are commonly used in design logos used by the health care and health insurance industry."

"Sam's Club has used a distinctive logo as part of its trademark for many years," Hargrove said. "The design adopted by HealthPartners is confusingly similar and we believe infringes on Sam's Club's intellectual property rights. Sam's Club intends to take the necessary action to protect and defend its trademark."

Terri Lee, the president and chief executive of Lee Branding in Minneapolis, said she couldn't comment on particular claims in the lawsuit.

There certainly have been examples of shapes becoming closely connected with consumer brands, Lee said, whether it's the triangular shape of the Nabisco logo or the circular blue "barrelhead" emblem at Pillsbury. The likelihood of corporate disputes over brand marks increases, she said, when companies are competing for the same customers.

For health care groups, the bottom line is that they are facing more pressure to develop logos and broader marketing campaigns that are distinctive.

"If you pull up most logos in health care, you'll see a lot of the color blue," Lee said. "Now we're adding some color and some passion that connects with consumers and patients."

The federal Affordable Care Act is expanding access to coverage for individuals who buy health insurance outside of employer groups, Foley said. So insurers have more reason to develop brands that can be recognized by individuals, not just benefits executives.

Plus, as deductibles get bigger in employer plans, workers have more incentive to shop around for care options in a retail mode. That makes brand reputations more important.

"We're at a really significant crossroads," Foley said. "The stakes have never been higher."

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck