Idaho Golf Partners, Inc. v. Penninsula Beverage Co. et al
MEMORANDUM DECISION AND ORDER denying in part 62 Plaintiff's Motion in Limine; granting 67 Defendant's Motion in Limine; denying without prejudice 68 Defendant's Motion in Limine; granting in part and denying in part 69 Defendant's Motion in Limine. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
IDAHO GOLF PARTNERS, INC.,
Case No. 1:14-cv-00233-BLW
MEMORANDUM DECISION AND
TIMBERSTONE MANAGEMENT, LLC.,
TIMBERSTONE MANAGEMENT, LLC.,
IDAHO GOLF PARTNERS, INC.,
Pending before the Court are Plaintiff/Counterdefendant’s motion in limine (Dkt.
62) and three motions in limine filed by Defendant/Counterclaimant (Dkts. 67, 68, 73-1).
The motions are fully briefed and at issue. For the reasons expressed below, the Court
will grant in part and deny in part the motions.
MEMORANDUM DECISION AND ORDER - 1
1. Plaintiff’s Motion in Limine (Dkt. 62)
Plaintiff’s motion seeks to preclude Defendant from introducing evidence or
testimony at trial referencing: (1) telephone calls from anonymous persons to
TimberStone Golf Course, as inadmissible hearsay, and (2) settlement offers or
statements made during settlement discussions or mediation proceedings. On September
19, 2016, the court issued an Order (Dkt. 97) granting in part and denying in part
plaintiff’s motion as to request (1). The Court takes up the remaining request here.
A. Settlement and Mediation Discussions
Plaintiff seeks to exclude any testimony or evidence regarding settlement offers or
statements made during settlement discussions or mediation proceedings, pursuant to
Federal Rule of Evidence 408. See Pl. Brief at 3, Dkt. 62.1 Defendant opposes the
motion, asserting that it has no intention of relying on such evidence for a purpose
prohibited under Rule 408 but may seek to rely on the evidence “for another purpose,
such as proving a witness’s bias or prejudice [and/or] negating a contention of undue
delay . . . .” See Def. Resp. at 6, Dkt. 83 (quoting Fed. R. Evid. 408(b)).
Rule 408 generally prohibits the introduction of evidence relating to offers of
compromise and statements made during the course of settlement negotiations to “prove
Plaintiff also cites to Federal Rule of Civil Procedure 68. Defendant contends, and Plaintiff does not
deny, that no offer of judgment has been made in this case. Therefore, Rule 68 does not apply. Fed. R.
Civ. P. 68.
MEMORANDUM DECISION AND ORDER - 2
or disprove the validity or amount of a disputed claim or to impeach by a prior
inconsistent statement or a contradiction.” Fed. R. Evid. 408(a). However, Rule 408 is
not an absolute ban on evidence regarding settlement negotiations.
It is presently unknown what testimony or evidence pertaining to settlement offers
or negotiations the parties may seek to introduce, and for what purpose. Therefore, the
Court declines at this stage to place a blanket prohibition on this category of evidence.
Defendant’s motion is DENIED, without prejudice to a timely objection to the
presentation of such evidence at trial. However, Plaintiff’s counsel is directed to raise the
issue with the Court outside the presence of the jury before attempting to offer evidence
concerning prior settlement discussions.
2. Defendant’s Motions in Limine
A. References to Prior or Pending Litigation (Dkt. 67)
Defendant asks the court to preclude Plaintiff from offering any testimony or
evidence, or making any other reference before the jury, regarding prior or pending
litigation between the parties. Def. Brief at 1–2, Dkt. 67-1. Relying on Federal Rules of
Evidence 401, 402, and 403, Defendant explains that such evidence has no probative
value and presents a substantial risk of unfair prejudice, confusing the issues, and
misleading the jury. Def. Brief at 5–8, Dkt. 67-1.
The parties refer specifically to three prior or pending proceedings. The first, the
“Cancellation Proceeding,” is the petition for cancellation of Defendant’s federally
registered trademark filed by Plaintiff on or about July 8, 2014 with the United States
MEMORANDUM DECISION AND ORDER - 3
Patent and Trademark Office (“USPTO”). Watkins Aff. Ex. E, Dkt. 67-7. The
Cancellation Proceeding has been stayed until this case reaches a final disposition, and
the USPTO has yet to rule on any substantive issues. Watkins Supp. Aff. in Support of
Def.’s Mot. for Summ. J. Ex. 1, Dkt. 49-1. The second proceeding, the “Illinois Action,”
is the trademark infringement lawsuit filed by Defendant on July 18, 2014 in the U.S.
District Court for the Northern District of Illinois. Watkins Aff. Ex. C, Dkt. 67-5. This
case was dismissed on November 6, 2014 for lack of personal jurisdiction and did not
reach the merits at issue. Watkins Aff. Ex. D, Dkt. 67-6. The third, the “Clerk’s Default,”
is the Clerk’s Entry of Default filed in this case on August 13, 2014 (Dkt. 10), which the
court later set aside on March 31, 2015 (Dkt. 26).
(1) Illinois Action and Clerk’s Default
Plaintiff states in its response to the motion in limine that it “has no intention of
mentioning [the Illinois Action and Clerk’s Default] in its case in chief, though
respectfully reserves the right to do so if raised by Defendant during the trial.” Pl. Resp.
at 4, Dkt. 82. Based on this representation, the Court will GRANT the motion as to the
Illinois Action and Clerk’s Default, but on the condition that Defendant not present any
evidence or testimony, or make any comment before the jury, regarding these prior
proceedings at any point during this trial.
(2) Cancellation Proceeding
The parties disagree on the admissibility of evidence regarding the pending
MEMORANDUM DECISION AND ORDER - 4
Defendant argues that such evidence is irrelevant under Rule 402, as it has no
“tendency to make any consequential fact at issue in this litigation any more or less
probable. . . . The Cancellation Proceeding says nothing about the validity of
[Defendant’s marks].” Def. Brief at 5, Dkt. 67-1. Defendant further contends that any
references to the Cancellation Proceeding should be excluded under Rule 403 as unduly
prejudicial, arguing that “the jury will ascribe weight to notions of ‘cancellation,’. . . and
may unevenly decide matters in [Plaintiff’s] favor once the jury hears that some other
adjudicative body has looked into the issue.” Def. Brief at 9, Dkt. 67-1.
Plaintiffs counters by arguing that evidence of the Cancellation Proceeding is (1)
relevant to the alleged invalidity of Defendant’s federal trademark registration; (2)
relevant to the Sleekcraft “strength of the mark” factor; (3) and necessary for establishing
a timeline of events essential to both parties’ theories of the case.
The Court disagrees that the Cancellation Petition is probative of the validity of
Defendant’s federal trademark registration. The mere fact that Plaintiff has filed a
petition does not “have any tendency to make [it] more or less probable” that Defendant’s
mark is invalid. Fed. R. Evid. 401(a). A decision from the USPTO granting or denying
Plaintiff’s petition could be relevant to the validity of Defendant’s federal trademark
registration and presumptive ownership of the mark. However, the Cancellation Petition
has been stayed pending the outcome in the present action, thus the Board will not rule on
any substantive issues prior to the resolution of this case. Finally, any grounds for
cancellation alleged in the petition can and have been raised again in the present action.
MEMORANDUM DECISION AND ORDER - 5
The Court also fails to see the relevance of the Cancellation Petition as to the
strength of the mark analysis.2 A trademark’s strength is generally measured by its
distinctiveness, or the degree to which it is “remembered and associated in the public
mind with the mark’s owner.” Network Automation, Inc. v. Advanced Sys. Concepts, Inc.,
638 F.3d 1137, 1149 (9th Cir. 2011). A pending petition with the USPTO has no obvious
bearing on the strength of Plaintiff’s mark, either inherently or in the marketplace.
Plaintiff’s brief offers no supporting authority or analysis to the contrary.
Likewise, any relevance stemming from the timing of the Cancellation Petition is
minimal, at best. Plaintiff argues that “the timing of Defendant’s application for
registration and the contents thereof is relevant to the jury’s ability to apply the facts to
the law as instructed by the Court.” Pl’s Resp. at 3, Dkt. 82. This appears to confuse the
subject of this motion, which is evidence of the Cancellation Proceeding, not evidence of
Defendant’s registration application. Plaintiff offers a laundry list of events generally
relevant to this action but no argument as to how the timing of Petition for Cancellation
may be relevant to such dates.3 The Court agrees that evidence that Plaintiff initiated a
Plaintiff states that “evidence concerning the USPTO proceedings is probative of the relative strength or
weakness of Plaintiff’s mark.” Pl’s Resp. at 4, Dkt. 82. (emphasis added). Defendant points out, and the
Court wishes to clarify, that the jury will be asked to evaluate the strength of Defendant’s mark.
Plaintiff’s list includes the following:
[W]hen the parties began using the term Timberstone, when the application for trademark
registration was filed, . . . the length of time and manner of the use of the claimed trademark as it
relates to the secondary meaning, whether there was continuous prior use within a remote
geographic area, and to what extent a party engaged in exclusive use of the mark . . .
Brief at 4, Dkt. 82.
MEMORANDUM DECISION AND ORDER - 6
cancellation proceeding may aid the jury’s understanding of the overall timeline of this
dispute. However, without more, any such value is substantially outweighed by the
danger of undue prejudice, confusing the issues, and undue delay, as noted below.
Rule 403 provides further justification for exclusion. There is a substantial risk
that the jury will ascribe undue weight to the notion that the USPTO has investigated this
issue. Furthermore, the jury may wrongly infer that the proceeding signals that USPTO
itself questions the mark’s validity. Allowing Plaintiff to refer to the Cancellation
Proceeding would require an explanation of the nature of cancellation proceedings, what
a “stay” means, what legal standards apply, and how a Cancellation Proceeding might
interact with the present action. Such evidence is likely to confuse the jury and needlessly
The Court concludes that references to the Cancellation Petition would be
irrelevant and otherwise outweighed by a danger of unfair prejudice, misleading the jury,
and undue delay. Thus, Defendant’s request is also GRANTED as to the Cancellation
Petition, including but not limited to Plaintiff’s Exhibit 1021 (the Petition for
B. Proximity Sleekcraft Factor (Dkt. 68)
Defendant next asks the court to prevent Plaintiff from introducing testimony,
evidence, or any argument before the jury concerning the legal significance of the
distance separating the two golf courses to the Sleekcraft “likelihood-of-confusion”
analysis. Relying on Federal Rules of Evidence 401, 402, and 403, Defendant suggests
MEMORANDUM DECISION AND ORDER - 7
that the distance between the two courses is irrelevant, because the Sleekcraft factors do
not deal with geographic proximity, and that any probative value of geographic proximity
evidence is substantially outweighed by a danger of undue prejudice, the potential to
confuse the issues, and the risk of misleading the jury. Additionally, relying on Rules 701
and 702, Defendant argues that testimony asserting that geographic distance lessens the
likelihood of consumer confusion goes to the legal standard underlying the ultimate issue
at trial and should be reserved for the jury.4
(1) Relevance and Rule 403 Balancing
To prevail on its Lanham Act claims, 15 U.S.C. § 1114, 15 U.S.C. § 1125(a),
Defendant must prove that Plaintiff’s “use of its mark is likely to cause consumer
confusion.” Dep't of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124
(9th Cir. 2006). To analyze the “likelihood of confusion,” courts within the Ninth Circuit
apply an eight-factor test introduced in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–
49 (9th Cir.1979). The Sleekcraft factors include: (1) strength of the mark; (2) proximity
of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing
channels used; (6) type of goods and the degree of care likely to be exercised by the
purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of
Defendant’s motion in limine appears limited to arguments about geographic proximity in the context of
the “likelihood-of-confusion” inquiry of a Lanham Act claim. Defendant stipulates that it does not object,
for example, to mention of the location of the two courses in the context of discussing “fame” under
trademark dilution or to restrict passing mentions of the two golf courses’ geographical locations. . Def.
Reply Brief at 8, Dkt. 86. Thus, the Court does not rule at this time on the admissibility of geographic
evidence with regard to other claims or defenses in this case.
MEMORANDUM DECISION AND ORDER - 8
the product lines. Id.
The Sleekcraft factors are “not exhaustive.” Network Automation, Inc. v. Advanced
Sys. Concepts, Inc., 638 F.3d 1137, 1153 (9th Cir. 2011) (quoting Sleekcraft, 599 F.2d at
348 n. 11). The Ninth Circuit has observed that other factors may be taken into account
and has counseled against applying the test mechanically. See, e.g., Network Automation,
638 F.3d at 1145 (“[o]ther variables may come into play depending on the particular facts
presented”); Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618
F.3d 1025, 1030 (9th Cir. 2010) (“This eight-factor analysis is ‘pliant,’ illustrative rather
than exhaustive, and best understood as simply providing helpful guideposts.”).
Ultimately, the inquiry must focus on the factual question of whether consumers are
likely to be confused.
Keeping in mind this flexible approach, the Court finds that geographic proximity
is an appropriate consideration in the likelihood-of-confusion analysis, even though it is
not an established factor in the Sleekcraft test. Common sense suggests that use of a mark
in two distinct and geographically separate markets may reduce the overlapping client
base that creates a potential for confusion. Furthermore, geographic proximity is relevant
to the analysis under established Sleekcraft factors. For example, geography is pertinent
to the “strength of the mark” factor, in that a mark’s strength may dissipate with distance.
Defendant observes that geographic proximity is not a factor expressly considered
in most Ninth Circuit decisions analyzing trademark infringement. However, Defendant
cites no authority for the proposition that geographic proximity should be excluded from
MEMORANDUM DECISION AND ORDER - 9
this analysis altogether. Furthermore, other courts recognize that geographic proximity is
relevant to consumer confusion. The Second Circuit recently found that in the “absence
of actual confusion or bad faith, substantial geographic separation remains a significant
indicator that the likelihood of confusion is slight.” Brennan’s, Inc. v. Brennan’s
Restaurant, L.L.C., 360 F.3d 125 (2d Cir. 2004). While the court applied a facially
different test, the ultimate inquiry was the same: whether consumers were likely to be
Defendant’s argument about the Ninth Circuit model jury instructions is equally
unpersuasive. While the model instructions do not expressly require consideration of the
distance between two companies, Def. Brief at 5, Dkt. 68-1, they emphasize that “all
relevant evidence” must be considered and even include a factor “[9. Other Factors. Any
other factors that bear on likelihood of confusion.].” Ninth Circuit Model Jury Instruction
On balance, the Court finds that testimony about geographic proximity is relevant
and will not create a substantial risk of unfair prejudice, confusing the issues, or
misleading the jury. The Court trusts that the jury will be able to properly weigh the
significance, if any, of the geographic distance between the two golf courses. And,
Defendant remains free to present evidence that golf courses, even ones separated by
large distances, do compete for the same customers through national press and online
To the extent necessary, Plaintiff will be precluded from arguing that “geographic
MEMORANDUM DECISION AND ORDER - 10
proximity” is one of the enumerated Sleekcraft factors. Plaintiff’s motion to exclude any
evidence of geographic proximity as it relates to the issue of “consumer confusion” is
(2) Lay Opinion Testimony under Rule 701
Defendant also seeks to preclude Plaintiff from eliciting—and counsel from
stating—speculative, non-expert testimony at trial on whether a golfer would likely to be
confused given the distances involved. Def. Brief at 8, Dkt. 68-1. Defendant argues that
such testimony goes to the legal standard underlying the ultimate issue at trial and should
be reserved for the jury, adding that such testimony “veers into expert witness territory.”
Id. at 9.
Opinion testimony from a lay witness must be “(a) rationally based on the
witness’s perception; (b) helpful to clearly understanding the witness’s testimony or to
determining a fact in issue; and (c) not based on scientific, technical, or other specialized
knowledge within the scope of Rule 702.” Fed. R. Evid. 701. “Lay opinion testimony is
not inadmissible solely because it addresses the ultimate issue in the case.” See 4-701
Weinstein's Federal Evidence § 701.05 (collecting cases); United States v. Crawford, 239
F.3d 1086, 1090 (9th Cir. 2001) (“A lay witness may testify as to an ultimate issue of
fact, so long as the testimony is otherwise admissible.”). However, lay witnesses may not
testify as to the applicable legal standards or tests. See Id.
The admissibility of lay opinion testimony of the type described by Plaintiff must
be decided under the particular facts and circumstances. An opinion grounded in a
MEMORANDUM DECISION AND ORDER - 11
witness’s unique experience that offers a perspective not otherwise available to the jury
may be helpful and admissible. On the contrary, lay opinion on the ultimate issue of
consumer confusion offered without supporting factual details would fail on the
“helpfulness” requirement. Fed. R. Evid. 701(b). In other words, if the jury’s opinion is
as good as the witness’, the opinion likely will be deemed unhelpful and inadmissible.
See generally 4-701 Weinstein's Federal Evidence § 701.05 (“Courts may properly be
wary . . . of admitting lay opinion testimony when its sole function is to answer the same
question that the trier of fact is to consider in its deliberations.”). Furthermore, such
testimony must be based on a proper foundation and “rationally based on the witness’s
perception.” Fed. R. Evid. 701(a).
For these reasons, plaintiff’s motion to exclude any non-expert testimony at trial
on whether a golfer would likely to be confused given the distances involved is DENIED,
without prejudice to timely objections to lay opinion evidence offered during the course
of the trial.
C. Initial Interest Confusion (Dkt. 73-1)
Finally, Defendant asks the court to preclude Plaintiff from offering evidence,
testimony, or making any reference before the jury regarding “the legal significance of
initial interest confusion and point-of-sale confusion.” Def. Brief at 2, Dkt. 69-1.
Defendant clarifies that it seeks to prevent Plaintiff from arguing “that point-of-sale
confusion is of greater importance than initial interest confusion, or that a lack of pointof-sale confusion prevents TimberStone from establishing a likelihood of confusion
MEMORANDUM DECISION AND ORDER - 12
under Sleekcraft.” Def. Reply Brief at 9, Dkt. 86.
The most widely recognized form of consumer confusion under Trademark law is
“point-of-sale confusion,” which occurs when a customer makes a purchase from one
company believing it to be the good or service from another. See J. Thomas McCarthy, 3
McCarthy on Trademarks and Unfair Competition (4th Ed. 2016) § 23:5. A different
variant, “initial interest confusion,” occurs where temporary confusion creates consumer
interest in a good or service but any confusion is dispelled before an actual purchase is
made. Multi Time Mach., Inc. v. Amazon.com, Inc., 804 F.3d 930, 946 (9th Cir. 2015),
cert. denied, 136 S. Ct. 1231, 194 L. Ed. 2d 185 (2016).
The Ninth Circuit has held that confusion of either variety is actionable under the
Lanham Act. Perfumebay.com Inc. v. eBay, Inc., 506 F.3d 1165, 1176 (9th Cir. 2007).
Both are “analyzed pursuant to the Sleekcraft factors for likelihood of confusion.”
Playboy Enterprises, Inc. v. Netscape Commc'ns Corp., 354 F.3d 1020, 1025 (9th Cir.
2004). Thus, Defendant in this case is not required to demonstrate a likelihood of pointof-sale confusion. Plaintiff is precluded from arguing otherwise.
The Court is reluctant to shut the door further. The Court finds the record before it
insufficient to prohibit all testimony “about the relative importance of initial interest
confusion and point-of-sale confusion.” The Court will allow Plaintiff to explore before
the jury whether there has been any point-of-sale confusion. The Court also declines to
prohibit Plaintiff from presenting argument regarding the sufficiency of Defendant’s
evidence. Certainly, the greater the overall evidence of consumer confusion, the stronger
MEMORANDUM DECISION AND ORDER - 13
Defendant’s claim. Moreover, a jury may properly conclude that short-lived initial
interest confusion is weaker evidence of actual confusion than more lasting initial interest
or point-of-sale confusion. See, e.g., Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135,
1150 (9th Cir. 2002) (“A reasonable juror may . . . find de minimis evidence of actual
confusion unpersuasive.”); accord Safeway Stores, Inc. v. Safeway Disc. Drugs, 675 F.2d
1160, 1167 (11th Cir. 1982) (“Short-lived confusion or confusion of individuals casually
acquainted with a business is worthy of little weight . . . .”).
Defendant’s motion as to initial interest confusion is therefore GRANTED IN
PART, insofar as it seeks to prevent Plaintiff from arguing that Defendant must
demonstrate actual or likely point-of-sale confusion. The motion is DENIED IN PART,
without prejudice, insofar as it seeks to prohibit other testimony, or argument, about the
presence or absence of “point-of-sale” confusion. Decisions concerning the admissibility
of such evidence, if offered, will be made during trial.
IT IS HEREBY ORDERED THAT:
Plaintiff’s Motions in Limine (Dkt. 62) is DENIED IN PART, without
prejudice to a more focused objection at trial, insofar as it seeks to prohibit
all evidence regarding settlement offers and negotiations.
Defendant’s Motion in Limine Regarding Pending or Past Litigation (Dkt.
67) is GRANTED as to the Illinois Action, Clerk’s Default, and
MEMORANDUM DECISION AND ORDER - 14
Defendant’s Motion in Limine Regarding Geographic Proximity (Dkt. 68)
is DENIED without prejudice.
Defendant’s Motion in Limine Regarding Initial Interest Confusion (Dkt.
69) is GRANTED IN PART, insofar as it seeks to prevent Plaintiff from
arguing that Defendant must demonstrate point-of-sale confusion in this
case, and DENIED IN PART, without prejudice, insofar as it seeks to
prohibit other testimony or argument, about the presence or absence of
DATED: September 21, 2016
B. Lynn Winmill
United States District Court
MEMORANDUM DECISION AND ORDER - 15
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