Louisville Marketing Inc. v. Jewelry Candles, LLC
Filing
64
MEMORANDUM, OPINION, AND ORDER by Magistrate Judge Dave Whalin on 11/4/2016 - JC's motion in limine to exclude expert testimony (DN 36) is GRANTED IN PART and DENIED IN PART. As to Dr. Morris, JC's motion is GRANTED, and his report is excl uded. As to Mr. Howard, JC's motion is GRANTED in that his ultimate conclusion as to likelihood of confusion and his speculation regarding what type of designer created the logos at issue should be excluded. However, JC's motion is DENIED as to the remainder of Mr. Howard's opinion. As to Ms. Holt, JC's motion is DENIED. cc: Counsel(DAK)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:15-CV-00084-DJH
LOUISVILLE MARKETING, INC.
d/b/a as JEWELRY IN CANDLES
Plaintiff/
Counterclaim Defendant
v.
JEWELRY CANDLES, LLC
Defendant/
Counterclaimant
v.
P. MICAH BUSE
Third-Party Defendant
MEMORANDUM, OPINION,
AND ORDER
Jewelry Candles, LLC, has filed a motion in limine to exclude the expert witness testimony
of Jon Morris, Brad Howard, and Krista Holt. (DN 36). Louisville Marketing Inc., doing business
as Jewelry in Candles, (collectively referred to herein as “LMI”) has filed a response (DN 47), and
JC has filed a reply (DN 58). This matter is ripe for ruling.
I. Background
Around July of 2012, Osagie Enaiho (“Enaiho”) was operating an online business named
Jewelry Candles (“JC”), which sells candles and wax tarts that contain concealed jewelry items.
(DN 6, at p. 6).
Enaiho operated his business as a sole proprietor until about April 30, 2013,
when he formed Jewelry Candles, LLC, as a Delaware limited liability company where he served
as the sole member and owner. (Id.) Over a month later, JC applied for federal registration of a
composite word mark stating “Jewelry JC Candles A Hidden Jewel Inside Every Candle,” which
the USPTO granted. (Id. at pp. 7-8). JC has also applied for federal registration of “Jewelry
Candles” and “Jewelry Candle” as word marks, but these applications remain pending before the
USPTO. (Id.).
In January of 2013, Enaiho contacted Louisville Marketing, Inc. (“LMI”) through LMI’s
website seeking information about search engine optimization (“SEO”) and search engine
marketing (“SEM”) services and graphic design services. (Id. at p. 9). LMI’s owner, Paul Micah
Buse (“Buse”), responded to Enaiho’s request, and asked for analytic reports and non-public
analytics about JC’s website. (Id.). Enaiho and Buse continued to communicate through e-mail
for several days, discussing JC’s business and efforts to protect its intellectual property.
Specifically, Buse indicated in an e-mail to Enaiho that he needed to secure his brand by
trademarking his product and idea before someone could steal it. (Id. at p. 10). On the same day
Buse sent that e-mail, and unbeknownst to Enaiho, Buse registered the domain
jewelryincandles.com. (Id.). Several days later, Buse and Enaiho met in person, and Buse
disclosed he had no interest in LMI providing marketing services to JC, but, rather, Buse wanted to
become partners with Enaiho and obtain an equity stake in JC. (Id. at p. 11). Enaiho declined
Buse’s offer. (Id.).
A few weeks later, LMI applied to assume the name “Jewelry in Candles” in Kentucky and
filed the application with the Kentucky Secretary of State. (Id. at p. 11). JC believes LMI
launched a competing online business around May 4, 2013, selling candles containing jewelry
items under the trade name “Jewelry in Candles.” As a result, JC filed a WIPO Complaint on
January 5, 2014, initiating proceedings requesting the transfer of LMI’s jewelryincandles.com
domain name and alleging that LMI is infringing on its trademark rights.
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LMI filed its Complaint with this Court on January 23, 2015, seeking a declaratory
judgment that the term “Jewelry in Candles” is a generic term for candle products with jewelry in
them, and, as such, LMI is not infringing on JC’s styled design mark by making, using, selling, and
offering to sell its candles with jewelry inside of them (DN 1, at pp. 6-7). JC filed an answer and
counterclaim, alleging trademark infringement, unfair competition and false designation of origin,
unfair competition in Kentucky, and requesting injunctive relief (DN 6).
II. Legal Standard
The admissibility of expert testimony is governed by Federal Rule of Evidence 702, which
provides:
a witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to
determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods;
and
(d) the expert has reliably applied the principles and methods to the
facts of the case.
Fed.R.Evid. 702.
In Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125
L.Ed.2d 469 (1993) and its progeny, Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141, 119
S.Ct. 1167, 143 L.Ed.2d 238 (1999), the Supreme Court charged trial courts with acting as
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“gatekeepers” to ensure expert testimony admitted pursuant to FRE 702 is relevant and reliable.
Daubert also identified a list of non-exhaustive factors to assess reliability, including: whether the
theory or method in question “can be (and has been) tested,” whether it “has been subjected to peer
review and publication,” whether it has a “known or potential rate of error,” and whether the
theory or technique enjoys “general acceptance: in the “relevant scientific community.” 509 U.S.
at 593-94. Daubert’s gatekeeping obligation applies not only to “scientific” testimony, but to all
expert testimony. Shepherd v. Unumprovident Corp., 381 F. Supp. 2d 608, 610 (E.D. Ky. 2005).
No matter how good an expert’s credentials may be, his opinion must be “supported by
more than subjective belief and unsupported speculation.” McLean v. Ontario, Ltd., 224 F.3d 797,
800-01 (6th Cir. 2000) (citation omitted); see also Tamraz v. Lincoln Elec., Co., 620 F.3d 665,
671-72 (2010). When the subject matter of an expert’s testimony is “within the knowledge or
experience of laymen,” the testimony is superfluous. Bartak v. Bell-Galyardt & Wells, Inc., 629
F.2d 523, 530 (8th Cir. 1980) (citing Bridger v. Union Ry., 355 F.2d 382, 387 (6th Cir. 1966)).
III. Analysis
1. Dr. Morris
JC argues that Dr. Morris’s report suffers from three flaws: (1) Dr. Morris analyzed an
incorrect version of Jewelry in Candles’ logo; (2) Dr. Morris’s opinions run contrary to Sixth
Circuit law on the issue of likelihood on confusion; and (3) Dr. Morris gave opinions as to legal
terms of art. (DN 36, at pp. 7-8).
The Court will initially address JC’s second argument, which states that Dr. Morris’s
opinions run afoul to Sixth Circuit law on the issue of likelihood of confusion. Because Dr.
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Morris did not attempt to test or consider the views of the consuming public, JC believes his
testimony lacks an evidentiary foundation and should be excluded. (DN 36, at p. 7). LMI
responds that Dr. Morris should be able to testify on likelihood of confusion because he has
personal knowledge and experience in the marketing industry. (DN 47, at p. 12). LMI primarily
relies on Betterbox Communs., Ltd. v. BB Techs., Inc., 300 F.3d 325, 328, 329 (3d Cir. 2002)),
where a divided Third Circuit panel found that although the expert’s testimony as to likelihood of
confusion was based on “personal knowledge or experience,” as opposed to a methodology
satisfying the Daubert factors, the testimony was admissible because it tracked “many” of the
factors for testing likelihood of confusion. 237 F.3d at 215.
In the Sixth Circuit, the question of whether there is a likelihood of confusion is “a mixed
question of fact and law.” Homeowners Group, Inc. v. Home Marketing Specialists, Inc., 931
F.2d 1100, 1107 (6th Cir. 1991). The further question of whether a given set of foundational facts
establishes a likelihood of confusion, however, is a “legal conclusion.” Id. (citing Wynn Oil v.
Thomas, 830 F.2d 1183, 1186 (6th Cir. 1988)).
This Circuit balances the following factors when evaluating likelihood of confusion: (1)
strength of the senior mark; (2) similarity of the marks; (3) relatedness of the goods or services; (4)
evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7)
the defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines.
Frisch’s Rests., Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir. 1982).
These factors imply no mathematical precision, and not all factors will be particularly helpful in
any given case. Homeowners Group, Inc., 931 F.2d at 1107. The ultimate question is “whether
relevant consumers are likely to believe that the products or services offered by the parties are
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affiliated in some way.” Id.; see also Maker’s Mark Distillery, Inc. v. Diageo North Amer., Inc.,
703 F. Supp. 2d 671, 690 (W.D. Ky. 2010).
The prevailing method for introducing evidence on the issue of likelihood of confusion is
through consumer surveys. See Thomas J. McCarthy, McCarthy on Trademarks and Unfair
Competition, § 32:158 (4th ed. 2013); Patsy’s Italian Rest., Inc. v. Banas, 531 F. Supp. 2d 483, 485
(E.D.N.Y. 2008). Although a consumer survey is not necessary to prove likelihood of confusion
exists, a lack of survey evidence weighs against any finding of actual confusion between the
parties’ marks. Patsy’s Italian Rest., Inc., 531 F. Supp. 2d at 485 (citing Merriam-Webster v.
Random House, Inc., 35 F.3d 65, 72 (2d Cir. 1994)).
Here, Dr. Morris did not rely on consumer survey evidence in opining that the only
similarity between the logos of JC and LMI are the words “jewelry” and “candles.” (DN 37-4, at
p. 2). Rather, Dr. Morris drew these conclusions based on his personal knowledge and expertise
in the marketing and advertising industry. Numerous courts have found that a personal opinion
offered by an expert as to likelihood of confusion, without survey evidence, should be excluded
because it usurps the jury’s role in making factual determinations. Flagstar Bank FSB v. Freestar
Bank, N.A., 687 F. Supp. 2d 811, 821 (C.D. Ill. 2009) (jury does not need assistance in comparing
similarities and differences of common English words but needs help in determining how the
similarities of words lead to confusion or how differences negate confusion); JIPC Management,
Inc. v. Incredible Pizza Co., Inc., 2009 WL 8591607, at *4 (C.D. Cal. July 14, 2009) (excluding
personal opinion of expert because expert should not opine “on the ultimate likelihood of
confusion between the parties’ marks.”); Patsy’s Italian Rest., Inc., 531 F. Supp. 2d at 485.
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Dr. Morris’s opinion would not be helpful to the jury because it is primarily based on his
personal observations regarding the similarities between the marks and does not rely on
specialized knowledge. He simply compared two logos, noting the logos each use the words
“jewelry” and “candles,” a conclusion the common juror does not need assistance in making. See
Flagstar Bank FSB, 687 F. Supp. 2d at 821. Similarly, Dr. Morris’s conclusion that several
companies market similar products with “candles and jewelry as part of the same vessel” on the
internet does not provide any real assistance to the trier of fact.
As for LMI’s reliance on Betterbox, the Court finds the present case distinguishable. In
Betterbox, the expert based his testimony on personal knowledge and experience and considered a
number of factors for evaluating likelihood of confusion in his analysis. The Third Circuit found
that even if the district court erred in admitting the expert’s testimony under these circumstances,
the error was harmless. 300 F.3d at 329.
In this case, Dr. Morris’s opinion does not appear to
track the likelihood of confusion factors from Frisch’s Rests., Inc., 670 F.2d at 648. It also seems
Dr. Morris only used his experience in marketing and advertising, along with a simple Google
search to draw his conclusions, whereas, the expert in Betterbox “examined the companies’s [sic]
catalogs,” “informally surveyed colleagues,” and “evaluated the catalogs’ target market.” 300
F.3d at 329.
LMI’s reliance on Betterbox, accordingly, is not persuasive.
Because the evidence in Dr. Morris’s report does not require any special knowledge, skill,
or experience to interpret and the jury is fully capable of understanding the same evidence and
making its own determination regarding similarity between the marks, Dr. Morris’s opinion is
properly excluded.1 JC’s motion in limine is, therefore, GRANTED as to Dr. Morris’s opinion.
1 It is not necessary to address JC’s additional arguments for exclusion of Dr. Morris’s testimony.
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2. Brad Howard
JC also identifies numerous flaws in Brad Howard’s (“Mr. Howard”) report that it believes
warrant exclusion. JC first takes issue with Mr. Howard’s unsupported speculation regarding the
kind of designer that likely created each logo and what goals these unknown designers had in
mind. (DN 36, at p. 9). JC also feels that Howard’s report, like Dr. Morris’s report, did not
consider the views of the consuming public and provides no evidentiary foundation to suggest that
he is a relevant consumer for these purposes. (DN 36, at p. 10). Finally, JC argues that Mr.
Howard’s report violates the “anti-dissection rule” of trademark law and improperly expresses an
“ultimate conclusion” that there is zero chance a side by side comparison of the two marks would
lead to confusion. (Id. at p. 11 (citing AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 795 (6th Cir.
2004)).
As a preliminary matter, the Court agrees that Mr. Howard’s opinions that Logo 1 “looks to
have been created by someone without professional training and without much thought to the goal
of the logo” and that Logo 2 “looks to have been created by a professional designer or agency with
extensive knowledge in creating logos with graphic elements that help customers identify what
they sell or make” are based improper speculation and are largely irrelevant.
Turning to JC’s second argument for excluding Howard’s opinion, the Court notes its
above analysis on expert opinions in evaluating likelihood of confusion to be instructive. Mr.
Howard based his opinion on his personal experience as a professional graphic designer rather
than on consumer survey evidence. While the lack of survey evidence weighs against admitting
Mr. Howard’s report, the Court must still determine whether Mr. Howard’s opinion interferes with
the jury’s role in making factual determinations. Mr. Howard’s report contains evidence less
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intuitive than that in Dr. Morris’s report. For instance, Mr. Howard discusses how LMI’s logo
utilizes purchased fonts or custom script that project elegance and inspire a feeling of being
“Home.” (DN 37-5, at p. 5). Particular fonts and graphic elements within a logo qualify as
specialized knowledge, that common jurors may need assistance in evaluating. To that end, the
Court will not exclude Howard’s opinion on this basis.
JC’s last argument for excluding Mr. Howard’s report focuses on his violation of the
“anti-dissection rule” and his ultimate conclusion that “if a person were walking down the street
and saw these two logos sitting next to each other, there is zero chance that they could be confused
for the same business.” (DN 36 (citing DN 37-5, at p. 6)). In assessing the similarity of marks,
the Sixth Circuit endorses the “anti-dissection rule,” which serves to remind courts that marks
should be viewed in their entirety and should focus on their overall impressions, not individual
features. AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 795 (6th Cir. 2004); Jet, Inc. v. Sewage
Aeration Sys., 165 F.3d 419, 423 (6th Cir. 1999).
However, it is not a violation of the
anti-dissection rule to “separately view the component parts as a preliminary step on the way to an
ultimate determination of probable customer reaction to the composite as a whole.” Midwest
Guaranty Bank v. Guaranty Bank, 270 F. Supp. 2d 900, 910 n. 6 (E.D. Mich. 2003) (quoting
McCarthy § 11:27 (4th ed. 2002)).
JC’s attempt to broaden the scope of the anti-dissection rule by citing to AutoZone, Inc. is
not compelling. In AutoZone, Inc., the Sixth Circuit found it was a violation of the anti-dissection
rule to delete the common word in the marks, which was “ZONE,” and consider the similarity
between only “AUTO” and “POWER.” 373 F.3d at 795. No such dissection occurred here.
While Mr. Howard did break down the two logos, he discussed the fonts and graphic elements of
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each logo as a preliminary step before determining that no likelihood of confusion exists between
the two marks. Mr. Howard’s opinion does not violate the anti-dissection rule.
JC’s final effort at excluding Howard’s testimony focuses on Mr. Howard’s “ultimate
conclusion that:
As a professional graphic designer for almost 20 years that has produced countless
logos and branding strategies. [sic] It is in my honest and professional opinion that
if a person were walking down the street and saw these two logos sitting next to
each other, there is zero chance that they could be confused for the same business.
(DN 37-5, at p. 6).
An expert’s opinion may embrace an ultimate issue to be decided by the trier of fact so long
as the issue embraced is a factual one. As explained above, “[w]hether there is a likelihood of
confusion is a mixed question of fact and law, but the determination of whether a given set of
foundational facts establishes a likelihood of confusion is a legal conclusion.” Homeowners
Group v. Home Marketing Specialists, 931 F.2d 1100, 1106-07 (6th Cir. 1991). Put otherwise,
“the determination of what is the state of affairs regarding each factor is a finding of fact[,]” but
“the further determination of likelihood of confusion based on those factors is a legal conclusion.”
Induct-O-Matic Corp. v. Inductotherm Corp., 747 F.2d 358, 361 (6th Cir. 1984). Mr. Howard’s
determination that no likelihood of confusion exists between the marks is a legal conclusion
because it supplies the jury with no information other than the witness’s view of how the verdict
should read. The Court therefore, will exclude Mr. Howard’s legal conclusion as to likelihood of
confusion, but his opinions on the individual foundational facts remain admissible and can be
considered.
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3. Krista Holt
JC’s motion in limine also challenges the testimony of LMI’s rebuttal witness, Krista F.
Holt. (DN 36, at p. 11). JC argues Holt’s report should be excluded because she: (1) is an “expert
for hire;” (2) opines as to legal conclusions; (3) determines the only relevant legal issues are
genericness and secondary meaning; and (4) subjectively advocates for the proper survey universe
in the case. (Id. at pp. 11-23).
First, JC contends Ms. Holt is a “quintessential expert for hire” because her report reads as
a legal brief and introduces legal conclusions in the guise of expert testimony. (DN 36, at p. 13).
LMI responds that a paid expert should be subject to scrutiny only when his or her testimony
derives from a theory or methodology created solely for purposes of litigation. (DN 47, at p. 7).
Courts draw a distinction between “experts for hire” and experts who testify as to matters
growing naturally and directly out of their research. Johnson v. Manitowoc Boom Trucks, Inc.,
484 F.3d 426, 435 (6th Cir. 2007). When a purported expert’s opinion is prepared solely for
litigation or when the expert spends the majority of their time testifying in trials, that fact may be
considered as a basis for exclusion. Banks v. Bosch Rexroth Corp., No. 5:12-345-DCR, 2014
WL 1364763, at *3 (E.D. Ky. Apr. 7, 2014) (citing Newell v. Rubbermaid, Inc. v. Raymond Corp.,
676 F.3d 521, 527 (6th Cir. 2012)). If the expert is found to be a “quintessential expert for hire,”
the party offering the expert must show support regarding the expert’s familiarity with the subject
in question. Johnson, 484 F.3d at 434.
While Ms. Holt’s report was prepared solely for litigation and Ms. Holt has testified as an
expert in at least ten trials over the past five years, she does not appear to be the type of
“quintessential expert for hire” that typically raises suspicion.
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Beyond providing expert
testimony in trials, Ms. Holt’s CV indicates she is well-credentialed and has spent years
performing consulting work regarding intellectual property. Ms. Holt has also published a
number of scholarly articles addressing legal issues involving patents and trademarks. (DN 37-6,
at p. 26).
While the fact that Ms. Holt’s report was prepared solely for litigation “does raise a
question regarding its reliability, that fact is not dispositive.” Banks, 2014 WL 1364763, at *4
(citing Hayes v. MTD Products, Inc., 518 F. Supp. 2d 898, 900-01 (W.D. Ky. 2007)). The Court
finds that because Ms. Holt has sufficient experience relating to trademarks and intellectual
property law, her rebuttal report should not be excluded on this ground. JC may nevertheless
raise this issue during cross-examination.
JC also argues Ms. Holt’s testimony should be excluded because she “introduces legal
conclusions in the guise of expert testimony.” (DN 36, at p. 13 (quoting United States v. v.
Gordon, 493 F. App’x 617, 626 (6th Cir. 2012)).
Specifically, JC opposes Ms. Holt’s
understanding of “trademark genericness” and the “doctrine of secondary meaning” and her
opinion that Dr. Peloza should have addressed these legal issues (DN 36, at p. 14).
Again, an expert’s opinion must “stop short of embracing the ‘legal terminology’” which
frames the ultimate legal conclusion which the jury must reach in the case.” Alvarado v. Oakland
County, 809 F. Supp. 2d 680, 688 (E.D. Mich. 2011) (citing Torres v. County of Oakland, et al.,
758 F.2d 147, 151 (6th Cir. 1985)). In the context of trademark infringement, courts have
generally found expert conclusions as to whether a mark is valid are inadmissible. See Ideal
World Marketing, Inc. v. Duracell, Inc., 15 F. Supp. 2d 239, 244 n. 2 (E.D.N.Y. 1998) (finding
expert opinion that a mark was “suggestive and not descriptive” to be an inadmissible legal
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opinion); Kern’s Kitchen, Inc. v. Bon Appetit, 669 F. Supp. 786, 791 (W.D. Ky. 1987), rev’d on
other grounds, 850 F.2d 692 (6th Cir. 1988) (finding testimony from expert that mark was not
generic to be inadmissible).
Here, Ms. Holt’s report does not opine as to legal conclusions. Although she uses the
legal terms “genericness” and “secondary meaning” throughout her opinion, she does not make a
determination that the marks at issue are generic or have secondary meaning. In fact, Ms. Holt
concludes only that Dr. Peloza’s surveys did not provide any information about genericness or
secondary meaning and did not follow one of the preferred survey models, neither of which is an
improper legal conclusion.
JC’s complaint that Ms. Holt’s discussion of Dr. Peloza’s survey universes is an improper
legal conclusion is similarly unfounded.
Evaluation of the propriety of a survey’s universe is
one factor in assessing the validity and how much weight a survey should receive. Ms. Holt’s
opinion that Dr. Peloza failed to survey the correct universe for determining whether or not
“Jewelry Candles” a generic term or has secondary meaning, accordingly, does not suggest an
answer to the ultimate issue in this case.
In its contemporaneous opinion ruling on LMI’s motions in limine to exclude expert
testimony, the Court found that Dr. Peloza’s opinions and surveys were admissible and any flaws
in the survey could be assessed in weighing the evidence. The Court finds the same path is
prudent as to Ms. Holt’s rebuttal report.
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ORDER
IT IS HEREBY ORDERED that JC’s motion in limine to exclude expert testimony (DN
36) is GRANTED IN PART and DENIED IN PART.
As to Dr. Morris, JC’s motion is GRANTED, and his report is excluded.
As to Mr. Howard, JC’s motion is GRANTED in that his ultimate conclusion as to
likelihood of confusion and his speculation regarding what type of designer created the logos at
issue should be excluded. However, JC’s motion is DENIED as to the remainder of Mr.
Howard’s opinion.
As to Ms. Holt, JC’s motion is DENIED.
Copies:
Counsel of Record
November 4, 2016
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