Blue Cross Warning Sends Nuns to Court

DENVER (CN) - It takes some doing to provoke a lawsuit from nuns, but Blue Cross has done it: by warning the Sisters of Charity, who run eight nonprofit hospitals, that they are violating its "blue cross" trademarks.

The Sisters of Charity of Leavenworth Health System sued Blue Cross and Blue Shield in Federal Court on Tuesday, seeking declaration of non-infringement and cancellation of a Blue Cross trademark.

In addition to eight hospitals, the Sisters of Charity run a children's mental health center, four "safety net" clinics and more than 190 ambulatory service centers in Colorado, Kansas and Montana. All are nonprofit, all "dedicated to improving the health of the communities and individuals it serves, especially those who are poor and vulnerable," the Sisters say in the complaint.

The Sisters of Charity's Mother House is in Leavenworth, Kan., on the campus of the University of Saint Mary. An industry publication this year included the Sisters in a list of "50 Great Health Systems to Know in the U.S.," along with the Mayo Clinic and Johns Hopkins.

The Sisters have used a registered cross logo with a heart in the center continuously since 1976, without challenge, a trademark they call "incontestable." In those years, the Sisters have had "numerous facility payor agreements" with Blue Cross Blue Shield companies, including Anthem.

But in February this year, a Blue Cross Blue Shield attorney warned the Sisters that they could not use a blue cross logo: "a clear warning to SCL Health that BCBS Association was prepared to initiate litigation against SCL Health."

The warning came after the Sisters updated their logo and filed an application with the Patent and Trademark Office. Blue Cross "made it known" to the Sisters that it objects to the updated logo "on the ground that part of SCL Health's updated mark contains, in part, a shade of blue. Through various statements, innuendoes, and outright threats, BCBS Association has asserted that the Updated Heart and Cross Mark infringes BCBS Association's trademark rights and dilutes the distinctive value of the Blue Cross Logo and Blue Shield Mark and has demanded that SCL Health cease using the Updated Heart and Cross Mark in combination with any blue color elements."

The Sisters find that odd, as Blue Cross has known of their cross logo for nearly 40 years, never challenged it or objected to it, and Blue Cross "has admitted that SCL Health's Updated Heart and Cross Mark is "virtually identical" to SCL Health's Legacy Heart and Cross Mark."

In addition, there are "hundreds of active trademarks" registered with the Patent and Trademark Office "that contain a cross design in association with medical and/or health care related goods and services."

"Like thousands of other Christian-founded health and medical service providers, SCL Health has used the symbol of the cross to denote its Christian heritage and holistic approach to health care and spiritual well-being," the Sisters say.

In addition, their new logo is blue and green. And Blue Cross too has updated its logo from time to time.

Blue Cross Blue Shield turned up the pressure by warning the Sisters that it might terminate its facility payor agreements with Sisters' Health hospitals, forcing patients who are insured with Blue Cross to pay more out of pocket costs, or be denied benefits completely.

"This would result not only in substantially decreased revenues to SCL Health, but in patient hardship, especially in those geographic areas where SCL Health is a principal healthcare provider or where patients have established healthcare relationships with SCL Health physicians and hospitals," the Sisters say.

They seek declaratory judgment of non-infringement and non-dilution, and cancellation of Blue Cross trademark No. 554,817, which the Sisters say Blue Cross already has abandoned. They also seek costs of suit.

The Sisters of Charity's attorneys declined to comment on the litigation.

Blue Cross Blue Shield did not respond to requests for comment.

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