KONINKLIJKE PHILIPS ELECTRONICS N.V. v. HUNT CONTROL SYSTEMS, INC.
OPINION. Signed by Judge Stanley R. Chesler on 6/29/16. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
KONINKIJKE PHILIPS ELECTRONICS
HUNT CONTROL SYSTEMS, INC., AN
ASSUMED TRADE NAME FOR CARIBE
Civil Action No. 11-3684 (SRC)(CLW)
CHESLER, District Judge
This matter comes before the Court upon four motions: (1) the motion for summary
judgment filed by Plaintiff/Counterclaim Defendant Koninkijke Philips Electronics N.V.
(“Philips”) [Docket Entry 189]; (2) the motion for summary judgment filed by
Defendant/Counterclaim Plaintiff Hunt Control Systems, Inc. (“Hunt”) [Docket Entry 179]; (3)
Hunt’s motion to exclude the expert report and testimony of Michael Barone (“Barone”) [Docket
Entry 183]; and (4) Hunt’s motion to exclude the expert report and testimony of Alex Simonson
(“Simonson”) [Docket Entry 186]. All motions have been opposed. The Court has considered
the papers filed by the parties and proceeds to rule on the motions without oral argument,
pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed below, the Court will
deny both of Hunt’s motions to exclude expert reports and testimony. The Court will deny
Hunt’s summary judgment motion, and the Court will grant in part and deny in part Philips’s
summary judgment motion.
This action is a trademark dispute between Hunt, the owner of the “Simplicity” trademark
for goods related to its lighting business, and Philips, who seeks to register the trademark “sense
and simplicity” with the United States Patent and Trademark Office (“PTO”) for goods related to
its lighting business.
a. THE PARTIES
Philips is a Dutch company, with its United States lighting headquarters located in New
Jersey. (Philips Statement of Material Facts, Docket Entry 190-1, at ¶ 1 [hereinafter PSMF];
Hunt Responsive Statement of Material Facts, Docket Entry 200, at ¶ 1 [hereinafter HRSMF].)
Philips has produced a wide variety of products throughout its history, including two main types
of lighting products in the United States until 2008: lamps and ballasts. (PSMF at ¶¶ 2, 4;
HRSMF at ¶¶ 2, 4.) Philips’s Advance business unit has been owned by Philips since 1959; it
manufactures ballasts and LED drivers, but does not sell lighting controls. (PSMF, at ¶¶ 11-12;
HRSMF at ¶¶ 11-12.) Philips sells 60 percent of its ballasts and 80 percent of its LED drivers
and modules to the Original Equipment Manufacturer (“OEM”) channel. (PSMF, at ¶ 13;
HRSMF at ¶ 13.) Philips’s sales of dimming controls, which account for less than 1 percent of
Philips’s U.S. lighting sales, go through professional (not individual consumer) channels.
(PSMF, at ¶¶ 14-15, 45; HRSMF at ¶¶ 14-15, 45.)
Hunt, a self-described leader in the lighting industry based in Fort Collins, Colorado, is a
manufacturer of architectural dimming systems. (PSMF at ¶¶ 20-22; HRSMF at ¶¶ 20-22.)
Hunt is solely owned by its President, Alan J. Glaser (“Glaser”). (PSMF at ¶ 20; HRSMF at ¶
20.) Hunt sells lighting controls, such as LED controllers and dimming systems, among other
goods. (PSMF at ¶ 30; HRSMF at ¶¶ 30.) Hunt has used the “Simplicity” mark, sometimes
alongside its housemark, for over 22 years. (PSMF at ¶¶ 25, 28; HRSMF at ¶¶ 25, 28.) Hunt
asserts that its products are well-known in the lighting industry. (PSMF at ¶ 25; HRSMF at ¶
25.) Hunt sells products through electrical distributors and sales representatives to a wide range
of consumers. (PSMF at ¶¶ 36-37; HRSMF at ¶¶ 36-37.) More than 90 percent of Hunt’s
dimming systems are used in commercial applications, and Hunt’s sales to individual consumers
may be less than 5 percent of its overall sales, since Hunt does not sell dimming panels at retail.
(PSMF at ¶¶ 45-47; HRSMF at ¶¶ 45-47.)
b. HUNT’S “SIMPLICITY” TRADEMARK
Hunt filed an application with the PTO to register “Simplicity” as a trademark for
industrial and commercial lighting control panels on June 8, 2004. (PSMF at ¶ 50; HRSMF at ¶
50.) The PTO issued Registration No. 3254393 to Hunt for “Simplicity” on June 26, 2007.
(PSMF at ¶¶ 50-52; HRSMF at ¶¶ 50-52.) Hunt began using the mark on its wallbox dimmers in
2007, and launched its “Simplicity” LED controller wallbox dimmer product in 2008. (PSMF at
¶¶ 55-56; HRSMF at ¶¶ 55-56.) Hunt alleges that it sources SIMPLICITY LIGHTING
SOLUTIONS lamps and bulbs, and that it has sold light bulbs featuring the mark “Simplicity.”
(PSMF at ¶¶ 57-58; HRSMF at ¶¶ 57-58.) Hunt also operates the website
www.simplicitylightingsolutions.com, which functions as a link to online lighting retailer Top
Bulb. (PSMF at ¶¶ 60-61; HRSMF at ¶¶ 60-61.) This website had generated only 13 orders as
of October 2013 (and no orders since 2010), with three of the 13 orders actually for Philips light
bulbs. (PSMF at ¶ 67; HRSMF at ¶ 67.) Hunt has promoted the compatibility of its products
with Philips products, and Philips has worked with Hunt to ensure that Hunt’s dimmers are
compatible with Philips’s ADVANCE ballasts. (PSMF at ¶¶ 69-70; HRSMF at ¶¶ 69-70.)
c. PHILIPS’S “SENSE AND SIMPLICITY” TAGLINE
Philips has used three different global taglines since 1995: “Let’s make things better,”
from 1995 to September 2004; “sense and simplicity,” from September 2004 to November
2013 1; and “innovation + you,” from November 2013 to the present. (PSMF at ¶¶ 3, 72;
HRSMF at ¶¶ 3, 72.) Philips selected the “sense and simplicity” tagline at the global level in its
Netherlands headquarters. (PSMF at ¶ 72; HRSMF at ¶ 72.) Before the final decision to adopt
this tagline was made, on March 26, 2004 Philips commissioned a United States-focused
trademark search that did not reveal Hunt’s use of its “Simplicity” trademark. (PSMF at ¶¶ 7274; HRSMF at ¶¶ 72-74.) At this time, Hunt had not applied to register “Simplicity” as a
trademark with the PTO or with any state trademark office. (PSMF at ¶ 74; HRSMF at ¶ 74.)
Philips holds an international trademark registration for “sense and simplicity,” with a
priority date of May 27, 2004. (Hunt Statement of Material Facts, Docket Entry 181, at ¶ 1-2
[hereinafter HSMF]; Philips Responsive Statement of Material Facts, Docket Entry 197-1, at ¶¶
1-2 [hereinafter PRSMF]; PSMF at ¶ 75; HRSMF at ¶ 75.) Philips filed a request for extension
of its international registration to the United States, under the Madrid Protocol treaty, on
September 3, 2004. (HSMF at ¶¶ 1-2; PRSMF at ¶¶ 1-2; PSMF at ¶ 76; HRSMF at ¶ 76.) 2
Philips launched its “sense and simplicity” campaign worldwide in September 2004, and began
using this tagline for a wide variety of products and services at that time. (PSMF at ¶ 77;
The parties dispute the timing of Philips’s transition from “sense and simplicity” to “innovation + you.” (PSMF at
¶ 3; HRSMF at ¶ 3.)
Requests for extension under the Madrid Protocol use the priority date of the underlying international registration,
here May 27, 2004. (PRSMF at ¶ 2.)
HRSMF at ¶ 77.) Philips typically used the tagline in conjunction with its Philips housemark.
(PSMF at ¶¶ 78-79; HRSMF at ¶ 78-79.) Philips’s brand usage guidelines prohibited the use of
the tagline on products and packaging. (PSMF at ¶ 80; HRSMF at ¶ 80.) The tagline typically
appeared at the bottom corner of sales literature and technical sheets, as well as on Philips’s
website. (PSMF at ¶¶ 81-82; HRSMF at ¶¶ 81-82.)
Philips used the “sense and simplicity” tagline at lighting industry trade shows, including
Lightfair. (PSMF at ¶ 83; HRSMF at ¶ 83.) Philips also used the tagline, along with the
“Philips” housemark, on marketing materials and specification sheets in the United States.
(PSMF at ¶ 18; HRSMF at ¶ 18.) In addition, Philips hosted an invitation-only “Simplicity
Event” in 2006 to show future products, had a five member “Simplicity Advisory Board” to
provide advice on healthcare, lifestyle, and technology issues, and used the term “simplicity”
descriptively in print advertisements. (PSMF at ¶¶ 84-86; HRSMF at ¶¶ 84-86.)
Philips spent millions of dollars in the United States on its advertising program, the
“Simplicity Brand Campaign,” beginning in 2004. (PSMF at ¶¶ 88-89; HRSMF at ¶¶ 88-89.)
Philips conducted market research from 2005 to 2006 that revealed that only 1 to 2 percent of
consumers who had seen Philips’s advertising knew the full tagline. (PSMF at ¶¶ 90; HRSMF at
Glaser first learned of Philips’s “sense and simplicity” tagline in 2005, but did not do
further research into the tagline at that time. (PSMF at ¶¶ 38; HRSMF at ¶¶ 38.) Hunt became
aware that Philips was using “sense and simplicity” in connection with lighting at the Light Fair
show in 2006. (Hunt Supplemental Statement of Facts, Docket Entry 201, at ¶ 168 [hereinafter
HSSF]; Philips Response to Hunt Supplemental Statement of Facts, Docket Entry 207-1, at ¶ 168
In 2008 and 2009, Philips acquired several lighting companies, including Genlyte
(producer of the LIGHTOLIER and STRAND brands), Dynalite, and Teletrol. (PSMF at ¶¶ 6-9;
HRSMF at ¶¶ 6-9.) Eventually, Philips replaced Genlyte’s trademarks with Philips’s housemark
on some, but not all, products. (PSMF at ¶¶ 17, 19; HRSMF at ¶¶ 17, 19.)
Philips began to phase out its use of “sense and simplicity” in 2012. (HSMF at ¶ 10;
PRSMF at ¶ 10.) Philips issued press releases in November 2013 announcing that it was
launching the new corporate tagline “innovation and you” on or around November 8, 2013.
(HSMF at ¶¶ 7, 14; PRSMF at ¶¶ 7, 14.)
d. THIRD-PARTY USE OF THE TERM “SIMPLICITY” IN TRADEMARKS
Multiple manufacturers of lighting products, including manufacturers of dimming
controls, use the word “Simplicity” as part of their mark or tagline. (PSMF at ¶¶ 94-114;
HRSMF at ¶¶ 94-114.) The lighting manufacturers EiKo, Legrand, Eaton/Cooper, and Traxon
have testified that they have no record of, and are not aware of, any confusion resulting from use
of the word “Simplicity” in their advertising and product marking. (PSMF at ¶¶ 95-96, 98-99,
103-04, 106-07; HRSMF at ¶¶ 95-96, 98-99, 103-04, 106-07.)
e. PROCEDURAL POSTURE
In response to Philips’s application to extend its international registration for “sense and
simplicity” under the Madrid Protocol, Hunt filed Opposition No. 91173417 before the
Trademark Trial and Appeal Board (“TTAB”) on October 13, 2006, alleging that Hunt was the
senior user of the mark “Simplicity” on six specific lighting goods. (HSMF at ¶ 3; PRSMF at ¶
3.) On April 27, 2011, the TTAB sustained Hunt’s Opposition as to the six specific goods Hunt
outlined, but it did not permit Hunt to extend its Opposition to other goods it had not claimed
originally. (HSMF at ¶ 4; PRSMF at ¶ 4.) Philips filed a Complaint with this Court for de novo
review of the portions of the TTAB decision adverse to Philips, pursuant to 15 U.S.C. § 1071(b),
on June 27, 2011 [Docket Entry 1]. Hunt filed its Answer and Counterclaims on September 6,
2011 [Docket Entry 7].
MOTIONS TO EXCLUDE EXPERT TESTIMONY
Before examining the parties’ substantive claims, the Court will first address Hunt’s
motions to exclude the expert reports and testimony of two experts offered by Philips: Michael
Barone [Docket Entry 183], and Alex Simonson [Docket Entry 186]. For the reasons explained
below, the Court will deny both motions.
a. LEGAL STANDARD
The Court bears an obligation to act as a gatekeeper and ensure that expert testimony is
both relevant and reliable. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137 (1999); Daubert v.
Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Furthermore, “the ‘proponent of expert
testimony must establish his expert is qualified and his testimony is admissible by a
preponderance of the evidence.’” Fancaster, Inc. v. Comcast Corp., 832 F. Supp. 2d 380, 402
(D.N.J. 2011) (quoting Poust v. Huntleigh Healthcare, 998 F. Supp. 478, 490 (D.N.J. 1998)).
Federal Rule of Evidence 702 sets the standard for admissibility of expert testimony. It
If scientific, technical, or other specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue, a witness qualified as an
expert by knowledge, skill, experience, training, or education, may testify thereto
in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient
facts or data, (2) the testimony is the product of reliable principles and methods,
and (3) the witness has applied the principles and methods reliably to the facts of
Framed another way, “Rule 702 has three major requirements: (1) the proffered witness must be
an expert, i.e. must be qualified; (2) the expert must testify about matters requiring scientific,
technical or specialized knowledge; and (3) the expert’s testimony must assist the trier of fact.”
Pineda v. Ford Motor Co., 520 F.3d 237, 244 (3d Cir. 2008).
Daubert articulated various factors that a district court may use to analyze the reliability
of expert testimony. That non-exhaustive list of factors is as follows: (1) whether the particular
theory can be and has been tested; (2) whether the theory has been subjected to peer review and
publication; (3) the known or potential rate of error; (4) the existence and maintenance of
standards controlling the technique's operation; and (5) whether the technique has achieved
general acceptance in the relevant scientific or expert community. Daubert, 509 U.S. at 593-94.
Later, in Kumho Tire, the Supreme Court held that the Daubert analysis applies to all expert
testimony, not only to scientific expert testimony. Kumho Tire, 526 U.S. at 141. The Supreme
Court has made clear that “the test of reliability is flexible, and Daubert's list of specific factors
neither necessarily nor exclusively applies to all experts or in every case.” Id.
Philips has submitted expert reports from Barone and Simonson that review the results of
consumer surveys showing that (1) Hunt’s customers have experienced no actual confusion
between Hunt’s trademark “Simplicity” and Philips’s tagline “sense and simplicity” in certain
portions of the market; and (2) there is no likelihood of confusion between these two marks
[Docket Entries 183, 186]. Survey evidence is routinely used in trademark infringement cases,
and is generally admissible to demonstrate actual confusion in cases involving alleged violations
of the Lanham Act. See, e.g., Shari Seidman Diamond, Reference Guide on Survey Research,
within the Reference Manual on Scientific Evidence, 235 (2d ed. Fed. Judicial Ctr. 2000);
Schering Corp. v. Pfizer Inc., 189 F.3d 218, 227-28 (2d Cir. 1999). Whether survey evidence is
admissible depends on the qualifications of the witness, how helpful the testimony is to the trier
of fact, and the reliability and fit of the testimony. 4 Weinstein’s Federal Evidence § 702.06
n.61. “[A]s long as [it is] conducted according to accepted principles . . . survey evidence should
ordinarily be found sufficiently reliable under Daubert. Unlike novel scientific theories, a jury
should be able to determine whether asserted technical deficiencies undermine a survey’s
probative value.” Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1143 n.8 (9th Cir.
1997) (internal citation omitted). The characteristics of a properly conducted survey are as
A proper universe must be examined and a Representative sample must be
chosen; the persons conducting the survey must be experts; the data must be
properly gathered and accurately reported. It is essential that the sample design,
the questionnaires and the manner of interviewing meet the standards of
objective surveying and statistical techniques. Just as important, the survey
must be conducted independently of the attorneys involved in the litigation. The
interviewers or sample designers should, of course, be trained, and ideally
should be unaware of the purpose of the survey or the litigation.
Pittsburgh Press Club v. United States, 579 F.2d 751, 758 (3d Cir. 1978) (citation omitted).
“[T]he closer the survey methods mirror the situation in which the ordinary person would
encounter the trademark, the greater the evidentiary weight of the survey results.” 6 J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competition § 32:163 (4th ed.) [hereinafter
McCarthy on Trademarks]. The proponent of a survey bears the burden to show that the
universe’s sampling conforms to recognized statistical standards; here, Philips bears that burden.
Id. § 32:159 (citing Manual for Complex Litigation § 21.493, p. 102 (3d ed. 1995)). “In the
context of survey evidence, ‘mere technical flaws’ in methodology go to ‘the weight accorded a
survey, not its admissibility’ . . . [h]owever, ‘fatal flaws’ in a survey’s methodology merit its
exclusion.” Fancaster, 832 F. Supp. 2d at 402 (quoting Citizens Fin. Grp., Inc. v. Citizens Nat’l
Bank of Evans City, 383 F.3d 110, 121 (3d Cir. 2004)). A survey may be excluded under Rule
702 if it is invalid or unreliable. Furthermore, under Federal Rule of Evidence 403, relevant and
otherwise admissible evidence may be excluded when the danger of unfair prejudice
substantially outweighs its probative value. See, e.g., Schering, 189 F.3d at 228.
Hunt primarily objects to the expert reports and testimony of Barone and Simonson
because of the “universe” selected by each expert in their respective survey. A survey’s universe
is “that segment of the population whose perceptions and state of mind are relevant to the issues
in the case.” Citizens Fin. Grp., 383 F.3d at 118-19 (quoting 6 McCarthy on Trademarks §
32:159). Surveys “of the wrong ‘universe’ will be of little probative value in litigation,” and the
party offering the survey bears the burden to show that the universe of the survey is proper. Id.
Furthermore, a survey that provides information about a wholly irrelevant universe of
respondents is irrelevant and should not be admitted into evidence. See id. at 119-20; see also J
& J Snack Foods, Corp. v. Earthgrains Co., 220 F. Supp. 2d 358, 368-69 (D.N.J. 2002). But
“[t]he selection of an inappropriate universe generally affects the weight of the resulting survey
data, not its admissibility.” 6 McCarthy on Trademarks § 32:162.
In a typical trademark case, the new, junior user of a mark attempts to use the “reputation
and good will of the senior user [to its advantage] by adopting a similar or identical mark.”
Fisons Horticulture Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 474 (3d Cir. 1994). Hunt does not
allege this type of confusion, commonly known as direct confusion, in this case. Instead, Hunt’s
theory of confusion is that Philips—a much larger company than Hunt, with significantly more
resources to spend on advertising—has likely caused confusion for consumers as to the source of
goods bearing Hunt’s “Simplicity” mark, based on Philips’s use of “sense and simplicity” as a
tagline. Hunt’s theory alleges an example of reverse confusion, which occurs “when a larger,
more powerful company uses the trademark of a smaller, less powerful senior owner and thereby
causes likely confusion as to the source of the senior user’s goods or services.” Id. Therefore,
“the universe in a reverse confusion case should be limited to the senior user’s customer base”—
here, Hunt’s actual customer base. Citizens Fin. Grp., 383 F.3d at 119.
B. MOTION TO EXCLUDE THE EXPERT REPORT AND TESTIMONY OF MICHAEL
Hunt first moves to exclude the expert report and testimony of Michael Barone [Docket
Entry 183]. Barone’s expert report and testimony focus on the survey he designed and
implemented to assess the likelihood of confusion among individual consumers for light bulb
products sourced by Hunt and sold at a website managed by Hunt,
www.simplicitylightingsolutions.com. (Barone 6/3/15 Report ¶ 6.) Barone surveyed
“consumers who had purchased light bulbs via the Internet in the last 6 months or who planned
to do so in the following 6 months.” (Barone 6/3/15 Report ¶ 9.) 3 These consumers were
divided into two equally-sized groups for the purposes of the survey, “test” and “control.”
(Barone 6/3/15 Report ¶ 10.) The test group were instructed to examine the homepage of
www.simplicitylightingsolutions.com, which displayed Hunt’s “Simplicity” trademark several
times, “as if you were looking to purchase light bulbs via the Internet and had encountered this
website.” (Barone 6/3/15 Report ¶ 12.) The control group viewed the same homepage, except
that all references to “Simplicity” had been removed. (Barone 6/3/15 Report ¶ 17.) Consumers
in both groups answered questions designed to probe reverse confusion, based on the survey
approved in Union Carbide Corp. v. Ever-Ready Inc, 531 F.2d 366, 387-88 (7th Cir. 1976).
(Barone 6/3/15 Report ¶¶ 11-18.) Barone found a less than one percent likelihood of confusion.
Qualifying participants had to successfully answer three screening questions to participate in the survey, including
a quality control check and a question designed to exclude individuals from the survey who may have had “unusual
knowledge of matters relevant in this case.” (Barone 6/3/15 Report ¶¶ 8-9.) The third screening question asked
participants “Have you purchased light bulbs over the Internet in the last 6 months or do you plan to purchase light
bulbs via the Internet in the next 6 months?” (Barone 6/3/15 Report ¶ 9.)
(Barone Report 6/3/15 ¶ 21, Table 1.) Based on his examination of the survey’s results, Barone
‘www.simplicitylightingsolutions.com’ website do not experience confusion
between Hunt and Philips due to Philips having used the tagline ‘Sense and
Simplicity.’ Specifically, these results show that such consumers are extremely
unlikely to experience confusion as to ownership, source, or affiliation between
Hunt and Philips.
(Barone 6/3/15 Report ¶ 24.)
Hunt objects to the Barone survey for three main reasons. First, Hunt argues that
Barone’s survey is under-inclusive because it only surveys the purchase of light bulbs, not other
Hunt products. Barone’s survey is also allegedly under-inclusive because it only surveys
individual consumers, not business, governmental, and institutional entities. Furthermore, the
Barone survey is, according to Hunt, under-inclusive because it only surveys “purchasers” and
not those who may influence a purchase, such as specifiers.
Hunt’s objections as to the under-inclusiveness of the Barone survey’s universe all
address purported technical flaws in the Barone survey. Even if a survey’s universe is imperfect,
this defect is not necessarily fatal to a survey’s admissibility. 6 McCarthy on Trademarks §
32:162 (“Even if a survey does not target what the court considers to be the optimal universe, the
results may be so compelling that it still supports the factual finding for which is was intended.”).
In fact, the use of an inappropriate universe generally affects the weight given to a survey, not its
admissibility. See id. Barone’s survey addresses a relevant population to the likelihood of
confusion inquiry in this case: consumers who purchase light bulbs through an online interface
managed by Hunt. In contrast, the Third Circuit upheld a district court’s exclusion of a
consumer survey where the interviewer polled consumers not located in the geographic area
relevant to the facts of the case. Citizens Fin. Grp., 383 F.3d at 118-21. In addition, a court in
this district excluded a consumer survey in which the goods at issue were only sold through and
advertised to food service distributors, but the survey only polled individual consumers. J & J
Snack Foods, 220 F. Supp. 2d at 371-72; see also Paco Sport, Ltd. v. Paco Rabanne Parfums, 86
F. Supp. 2d 305, 322-23 (S.D.N.Y. 2000) (rejecting a survey that surveyed purchasers of
fragrances, instead of jeans or casual clothing, where jeans and casual clothing were the relevant
products in the litigation). Barone’s survey does not exclude the entire relevant population for a
reverse confusion inquiry; it examines a relevant population, those consumers seeking to
purchase lightbulbs through Hunt’s online interface. The Court will consider arguments as to the
extent to which that Barone’s survey does not address the whole relevant universe of Hunt’s
consumers at trial, and adjust the weight given to the survey accordingly. For these reasons, the
Court will not exclude the Barone survey for being fatally under-inclusive as to its universe.
Hunt’s criticism that the Barone survey is over-inclusive for surveying parties who
purchased light bulbs in the past six months is also not fatal to the survey’s admissibility as it
addresses the technical merits of the survey. (Barone 6/3/15 Report ¶ 9.) Surveys, by design,
can only approximate actual purchasing conditions to show the state of mind of a prospective
purchaser. 6 McCarthy on Trademarks § 32:163. Some courts have excluded surveys where the
respondents solely consisted of parties who had already purchased the good at issue. See, e.g.,
Paco Sport, 86 F. Supp. 2d at 323 (citing Universal City Studios, Inc. v. Nintendo Co., Ltd., 746
F.2d 112, 118 (2d Cir. 1984)). This is not the case with the Barone survey, where the universe
includes both those who have purchased light bulbs and those who intend to purchase light bulbs.
Furthermore, the Barone survey replicated how consumers encounter the light bulbs online
through Hunt’s website. The Court also notes that “[l]ikely confusion of purchasers does not
define the only type of confusion that may be relevant. Confusion of non-purchasers may be just
as important in some cases.” 6 McCarthy on Trademarks § 32:163. No survey is perfect, and to
the extent that this survey does not perfectly replicate market conditions, the Court may give it
less evidentiary weight at trial.
For the reasons stated above, Hunt’s motion to exclude the expert report and testimony of
Barone is denied.
C. MOTION TO EXCLUDE THE EXPERT REPORT AND TESTIMONY OF ALEX
Hunt further asks the Court to exclude the expert report and testimony of Alex Simonson
[Docket Entry 186]. Simonson conducted a national telephone study of electrical engineers and
electrical contractors to assess the likelihood of reverse confusion. (Simonson May 2015 Report
at 1.) Specifically, Simonson surveyed “electrical engineers and electrical contractors who
specify or choose architectural dimming systems and controls and/or architectural wallbox
dimmers and who have been doing so for one or more years.” (Simonson May 2015 Report at
4.) Simonson asked participants to view the Hunt Dimming website (www.huntdimming.com)
“as if [the participant was] now considering specifying or choosing this company’s products.”
(Simonson May 2015 Report at 7.) The survey directed participants to a number of places on the
Hunt Dimming website displaying the “Simplicity” mark. (Id.) Participants then answered
questions designed to probe reverse confusion, based on the survey approved in Union Carbide
Corp. v. Ever-Ready Inc, 531 F.2d 366, 387-88 (7th Cir. 1976). (Simonson May 2015 Report at
8.) In his report, Simonson states that:
The results of this study indicate virtually no detectable level of reverse confusion
with respect to the relevant universe studied . . . Electrical engineers and contractors
seeing, hearing, and reading about Hunt’s Simplicity are not confusing the line or
brand with Philips or with Philips’s Sense and Simplicity. There is no evidence
that the engineers or contractors believe that Philips is the source of Hunt’s goods
or that Philips is affiliated with Hunt or that Philips provided authorization to Hunt.
(Simonson May 2015 Report at 1.) Simonson based his conclusion on finding that only 3 of 336
participants in the survey mentioned Philips or a division of Philips (Lightolier) in their answers
to the survey questions, and none of these positive responses indicated that Philips’s “sense and
simplicity” tagline prompted the participant’s answer. (Simonson May 2015 Report at 2.)
Hunt asserts three main arguments as to why the Simonson survey is under-inclusive.
First, Hunt argues that the Simonson survey is under-inclusive because it only surveyed
purchasers of architectural dimming systems and controls, and/or architectural wallbox dimmers.
Furthermore, the Simonson survey is allegedly under-inclusive for only surveying electrical
engineers and electrical contractors, versus non-professional consumers or other lighting
professionals. Hunt further argues that the Simonson survey is under-inclusive for only
surveying those who “specify or choose” lighting products.
As noted in the Court’s analysis of the Barone survey, any flaws as to the underinclusivity of the Simonson survey’s universe are not necessarily fatal to its admissibility. 6
McCarthy on Trademarks § 32:162. Simonson’s survey assessed the likelihood of confusion
amongst electrical engineers and electrical contractors, which are a significant part of the
universe of consumers who would select or purchase Hunt products. Furthermore, the results of
this survey are compelling on the issue of likelihood of confusion, since virtually no likelihood
of confusion is shown. (Simonson May 2015 Report at 4.) Given that use of an inappropriate
universe generally affects the weight given to a survey, not its admissibility, the Court will not
exclude the Simonson survey for being fatally under-inclusive as to its universe.
In addition, Hunt asserts that the Court should exclude the Simonson survey because it
does not use proper control methodologies. Philips asserts that controls were not needed for this
survey, given that the survey did not have actionable levels of confusion and thus concerns about
“noise from preexisting beliefs, yea-saying, and guessing (both random and biased)” are
minimal. (Opp. Br. at 18 (quoting 6 McCarthy on Trademarks § 32:187 (citation omitted))).
Many courts have recognized that surveys lacking control questions or groups may be unreliable,
depending on how the survey is designed. See, e.g., THOIP v. Walt Disney Co., 690 F. Supp. 2d
218, 240 (S.D.N.Y. 2010). Here, Simonson restricted the survey to professionals with at least
some experience in the electrical field, therein screening the respondents of the survey for an
appropriate level of knowledge about the field. See, e.g., Black & Decker Corp. v. Positec USA
Inc., No. 11-cv-5426, 2015 WL 5612340, at *20 (N.D. Ill. Sept. 22, 2015) (citing Nat’l Football
League Props., Inc. v. ProStyle, Inc., 57 F. Supp. 2d 665, 668 (E.D. Wis. 1999)). In addition,
Simonson included all respondents who mentioned Philips or a Philips-owned subsidiary in his
results. Simonson’s results indicate that very few, if any, electrical professionals surveyed have
mistaken beliefs about the relationship between Hunt and Philips. The only function of a control
in this survey would have been to further reduce the number of respondents whose mention of
Philips would be considered in the likelihood of confusion analysis, and here, that exclusion
would have been pointless. As a further issue, Hunt has not explained to the Court what controls
it believes Simonson should have used in this survey.
If the lack of a control is problematic in this survey, and the Court is not convinced that it
is, this is a technical deficiency which goes to the weight that should be given to the survey, not
its admissibility. Hunt’s criticisms may be appropriate issues to explore at trial, but the lack of
control in Simonson’s survey does not justify excluding the survey at this point in time. See,
e.g., Ironclad, L.P. v. Poly-Am., Inc., No. Civ.A. 3:98-CV-2600, 2000 WL 1400762, at *8 (N.D.
Tex. July 28, 2000) (“[A] Court need not exclude the survey due to the lack of control, as
generally, technical deficiencies go to the weight rather than admissibility.”).
For the above reasons, the Court will deny Hunt’s motion to exclude Simonson’s report
MOTIONS FOR SUMMARY JUDGMENT
Both parties have filed motions for summary judgment. Hunt seeks summary judgment
on Philips’s request for de novo review of portions of the TTAB’s April 27, 2011 decision that
are adverse to Philips [Docket Entry 179]. Philips moves for summary judgment on Hunt’s
trademark infringement liability and damages counterclaims [Docket Entry 189]. For the
reasons described below, Hunt’s motion will be denied, and Philips’s motion will be granted in
part and denied in part.
a. LEGAL STANDARD FOR SUMMARY JUDGMENT
Summary judgment is appropriate under Fed. R. Civ. P. 56(c) when the moving party
demonstrates that there is no genuine issue of material fact and the evidence establishes the
moving party’s entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986). A factual dispute is genuine if a reasonable jury could return a verdict for
the non-movant, and it is material if, under the substantive law, it would affect the outcome of
the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “In considering a motion
for summary judgment, a district court may not make credibility determinations or engage in any
weighing of the evidence; instead, the non-moving party's evidence ‘is to be believed and all
justifiable inferences are to be drawn in his favor.’” Marino v. Indus. Crating Co., 358 F.3d 241,
247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at 255).
“When the moving party has the burden of proof at trial, that party must show
affirmatively the absence of a genuine issue of material fact: it must show that, on all the
essential elements of its case on which it bears the burden of proof at trial, no reasonable jury
could find for the non-moving party.” In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003)
(quoting United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1438 (11th Cir. 1991)).
“[W]ith respect to an issue on which the nonmoving party bears the burden of proof . . . the
burden on the moving party may be discharged by ‘showing’—that is, pointing out to the district
court—that there is an absence of evidence to support the nonmoving party’s case.” Celotex,
477 U.S. at 325.
Once the moving party has satisfied its initial burden, the party opposing the motion must
establish that a genuine issue as to a material fact exists. Jersey Cent. Power & Light Co. v.
Lacey Twp., 772 F.2d 1103, 1109 (3d Cir. 1985). The party opposing the motion for summary
judgment cannot rest on mere allegations and instead must present actual evidence that creates a
genuine issue as to a material fact for trial. Anderson, 477 U.S. at 248; Siegel Transfer, Inc. v.
Carrier Express, Inc., 54 F.3d 1125, 1130-31 (3d Cir. 1995). “[U]nsupported allegations . . . and
pleadings are insufficient to repel summary judgment.” Schoch v. First Fid. Bancorporation,
912 F.2d 654, 657 (3d Cir. 1990); see also Fed. R. Civ. P. 56(e) (requiring the nonmoving party
to “set out specific facts showing a genuine issue for trial”). “A nonmoving party has created a
genuine issue of material fact if it has provided sufficient evidence to allow a jury to find in its
favor at trial.” Gleason v. Norwest Mortg., Inc., 243 F.3d 130, 138 (3d Cir. 2001).
If the nonmoving party has failed “to make a showing sufficient to establish the existence
of an element essential to that party’s case, and on which that party will bear the burden of proof
at trial . . . there can be ‘no genuine issue of material fact,’ since a complete failure of proof
concerning an essential element of the nonmoving party’s case necessarily renders all other facts
immaterial.” Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992) (quoting Celotex,
477 U.S. at 322-23).
Summary judgment may be appropriate in reverse confusion trademark cases. See, e.g.,
Fancaster, 832 F. Supp. 2d at 431 (granting summary judgment for defendant Comcast, finding
that defendant’s mark “Fancast” did not create a likelihood of reverse confusion with plaintiff’s
mark “Fancaster”); see also Kinbook, LLC v. Microsoft Corp., 866 F. Supp. 2d 453, 472 (E.D.
Pa. 2012), aff’d, 490 F. Appx. 491, 492 (3d Cir. 2013) (granting summary judgment for
defendant where plaintiff failed to demonstrate a likelihood of reverse confusion between
plaintiff’s “Kinbox” trademark and defendant’s “Kinect” and “KIN” products). That being said,
“[f]ailure to strictly observe the principles governing summary judgment becomes particularly
significant in a trademark or tradename action, where summary judgments are the exception.”
Country Floors, Inc. v. P’ship Composed of Gepner and Ford, 930 F.2d 1056, 1062-63 (3d Cir.
1991) (citation omitted). Therefore, courts should not be too eager to grant summary judgment
in a trademark action.
b. HUNT’S MOTION FOR SUMMARY JUDGMENT
Hunt moves for summary judgment on Philips’s request for de novo review of sections of
the TTAB’s April 27, 2011 decision on Philips’s Madrid Protocol application for its tagline
“sense and simplicity” [Docket Entry 179]. Hunt alleges that Philips abandoned its tagline in
2012 or sometime in 2013, when it began the “innovation + you” campaign [PSMF at ¶¶ 3, 72;
HRSMF at ¶¶ 3, 72]. As a result of Philips’s abandonment, Hunt asserts that Philips’s request
for de novo review of the TTAB’s decision is now moot. For the reasons described below, the
Court will deny Hunt’s motion.
The Lanham Act provides several ways to register a trademark in the United States. 15
U.S.C. § 1051 et seq (2012). Section 1(a) of the Lanham Act governs applications for marks
already in use in the United States, while Section 1(b) applications are based on the applicant’s
intent to use the mark in commerce. Id. For applications under both of these provisions, the
applicant must actually use the trademark in commerce before the PTO will issue a registration.
Id. Section 66(a) of the Lanham Act also permits holders of international trademark registrations
to request that the PTO extend their trademark protection to the United States, under the Madrid
Protocol treaty’s extension of protection rules. 15 U.S.C. § 1141 (2012). The Madrid Protocol
treaty facilitates the international registration of trademarks between member nations, and the
International Bureau of the World Intellectual Property Organization manages its
implementation. 3 McCarthy on Trademarks § 19:31.20. The United States and European Union
are members of the Madrid Protocol, as are many member nations of the European Union. Id.
The Lanham Act outlines the following requirements for Madrid Protocol applications to
A request for extension of protection of an international registration to the United
States that the International Bureau transmits to the United States Patent and
Trademark Office shall be deemed to be properly filed in the United States if such
request, when received by the International Bureau, has attached to it a declaration
of bona fide intention to use the mark in commerce that is verified by the applicant
for, or holder of, the international registration.
15 U.S.C. § 1141f. A declaration of bona fide intention to use the mark in commerce must
include a statement that “the applicant . . . has a bona fide intention to use the mark in
commerce.” 15 U.S.C. § 1141(5). Furthermore, “[e]xtension of protection shall not be refused
on the ground that the mark has not been used in commerce.” 15 U.S.C. § 1141h.
A trademark registration may be cancelled “[a]t any time if the registered mark . . . has
been abandoned” by the trademark holder. 15 U.S.C. § 1064(3) (2012). Section 45 of the
Lanham Act states:
A mark shall be deemed to be “abandoned” if . . . its use has been discontinued with
intent not to resume such use. Intent not to resume may be inferred from
circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of
abandonment. “Use” of a mark means the bona fide use of such mark made in the
ordinary course of trade, and not made merely to reserve a right in a mark.
15 U.S.C. § 1127. “[T]o establish the defense of abandonment [under the Lanham Act] it is
necessary to show not only acts indicating a practical abandonment, but an actual intent to
abandon.” Marshak v. Treadwell, 240 F.3d 184, 198 (3d Cir. 2001) (quoting Saxlehner v. Eisner
& Mendelson Co., 179 U.S. 19, 31 (1900)). “[A]bandonment, being in the nature of a forfeiture,
must be strictly proved.” United States Jaycees v. Phila. Jaycees, 639 F.2d 134, 139 (3d Cir.
1981); see also Doeblers’ Penn. Hybrids, Inc. v. Doebler, 442 F.3d 812, 822 (3d Cir. 2006) (“A
party arguing for abandonment has a high burden of proof”). Therefore, to adequately plead a
claim for abandonment, a party must show either (1) at least three consecutive years of nonuse of
a trademark, or (2) a period of nonuse of less than three years combined with proof of intent to
not resume use. 15 U.S.C. § 1127; see Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d
1575, 1579 (Fed. Cir. 1990).
As noted above, Section 66(a) applicants under the Madrid Protocol are not required to
use a mark in United States commerce at any time prior to registration. 4 See 15 U.S.C. §
1141(h)(a)(3); cf. 15 U.S.C. 1141f(a) (requiring a declaration of “bona fide intention to use the
Once the registration issues, a holder of a United States trademark issued through Section 66(a) must use the
registered mark in commerce to avoid abandoning its registration. Saddlesprings, Inc. v. Mad Croc Brands, Inc.,
104 U.S.P.Q.2d 1948, 1951 (TTAB 2012).
mark in commerce”). The TTAB recently examined the issue of registration under Section 66(a)
Because use is not required for an application filed under Trademark Act Section
66(a), we hold that in order to sufficiently plead a claim for cancellation of a Section
66(a) registration on grounds of abandonment for nonuse, the plaintiff must allege,
as of the date the claim is filed, either:
(a) three or more consecutive years of nonuse commencing no earlier than
the date on which the registration was issued; or,
(b) if the period of non-use commencing no earlier than the date of
registration and extending to the filing date of the claim is less than three
years, facts supporting nonuse after the date of registration, coupled with an
intent not to resume use.
Dragon Bleu (SARL) v. Venm, LLC, 112 U.S.P.Q.2d 1925, 1931 (TTAB 2014). Therefore,
courts should “not consider any time prior to the issuance of a Section 66(a) registration as
constituting a period of nonuse for purposes of abandonment.” Id. Furthermore, “[t]here can be
a period of time during which a holder of a registration based on § 66(a) has not actually used the
mark in commerce but still asserts a bona fide intention to do so. It is in this liminal state that a
petition to cancel a registration on the ground of a lack of bona fide intent to use the mark can be
heard.” Sandro Andy, S.A. v. Light Inc., No. 12-Civ-2392, 2012 WL 6709268, at *3 (S.D.N.Y.
Dec. 27, 2012) (emphasis added).
Hunt has not offered sufficient evidence such that a reasonable jury could find that
Philips abandoned its Section 66(a) application for an extension of its international registration
for “sense and simplicity.” Hunt does not dispute that Philips satisfied all requirements under
Section 66(a) for filing an application for extension of its international registration, including the
filing of a declaration of bona fide intention to use the mark in commerce at the time of
application. The PTO has not issued Philips a trademark for “sense and simplicity” under the
Madrid Protocol, however, because the TTAB sustained Hunt’s opposition of Philips’s
trademark application as to certain lighting goods in 2011. Hunt Control Sys. Inc. v. Koninkijke
Philips. Elec. N.V., 98 U.S.P.Q. 1558 (TTAB 2011). Philips has not formally withdrawn its
application, and in fact this case is currently before this Court because Philips seeks review of
the TTAB’s decision. Given that Section 66(a) does not require a trademark applicant to use the
trademark in commerce prior to a registration’s issuance, the Court will not consider events
occurring before a trademark registration issues as part of a period of nonuse. Dragon Bleu, 112
U.S.P.Q.2d at 1931.
Based on this reasoning, Hunt cannot satisfy the requirements to show that Philips has
abandoned its application. Since Philips’s registration has not yet issued, Hunt cannot
demonstrate any period of nonuse, under Dragon Bleu’s requirements. Therefore, Hunt cannot
show either that Philips has not used “sense and simplicity” for three years following the date of
registration issuance (since there is no documented period of nonuse), or that Philips has not used
“sense and simplicity” for a shorter period of time, coupled with an intent to not use the “sense
and simplicity” tagline in the future.
Hunt has not offered sufficient evidence such that a reasonable jury could find that
Philips has abandoned its application for the “sense and simplicity” trademark. For these
reasons, Hunt’s motion for summary judgment is denied.
c. PHILIPS’S MOTION FOR SUMMARY JUDGMENT ON LIABILITY AND DAMAGES
Philips moves for summary judgment on Hunt’s trademark infringement liability and
damages counterclaims [Docket Entry 189]. The Court will deny Philips’s motion on liability,
and will grant Philips’s motion as to the availability of all requested forms of monetary damages.
i. TRADEMARK INFRINGEMENT: LIKELIHOOD OF CONFUSION BETWEEN
“SENSE AND SIMPLICITY” AND “SIMPLICITY”
“The Lanham Act defines trademark infringement as use of a mark so similar to that of a
prior user as to be ‘likely to cause confusion, or to cause mistake, or to deceive.’” Kos Pharms.,
Inc. v. Andrx Corp., 369 F.3d 700, 711 (3d Cir. 2004) (quoting 15 U.S.C. § 1114(1)). Thus
“[t]he law of trademark protects trademark owners in the exclusive use of their marks when use
by another would be likely to cause confusion.” Interpace Corp. v. Lapp, Inc., 721 F.2d 460,
462 (3d Cir. 1983). “A claim of trademark infringement is established when the plaintiff proves
that: (1) its mark is valid and legally protectable; (2) it owns the mark; and (3) the defendant’s
use of the mark to identify its goods or services is likely to create confusion concerning the
origin of those goods or services.” Commerce Nat’l Ins. Servs., Inc. v. Commerce Ins. Agency,
Inc., 214 F.3d 432, 437 (3d Cir. 2000) (citing Opticians Ass’n of Am. v. Indep. Opticians of Am.,
920 F.2d 187, 192 (3d Cir. 1990)). The parties do not dispute that Hunt owns the valid and
legally protectable mark “Simplicity,” and thus the Court must consider the likelihood of
confusion between the Hunt and Philips marks.
“A likelihood of confusion exists when consumers viewing the mark would probably
assume that the product or service it represents is associated with the source of a different
product or service identified by a similar mark.” A & H Sportswear Inc. v. Victoria’s Secret
Stores, Inc., 237 F.3d 198, 211 (3d Cir. 2000) (quoting Dranoff-Perlstein Assocs. v. Sklar, 967
F.2d 852, 862 (3d Cir. 1992) (quotation marks omitted)). The relevant inquiry for the court is
whether confusion is likely, not whether confusion is merely a possibility. Id. at 198.
As discussed above, the Third Circuit has recognized two types of likelihood of
confusion claims: direct confusion claims and reverse confusion claims. Freedom Card, Inc. v.
JPMorgan Chase & Co., 432 F.3d 463, 470 (3d Cir. 2005). In a direct confusion claim, a
trademark owner alleges facts where “a junior user of a mark attempts to free-ride on the
reputation and goodwill of the senior user by adopting a similar or identical mark.” Id. at 470
(citing A & H Sportswear, 237 F.3d at 228). Therefore, “the consuming public may assume that
the established, senior user is the source of the junior user’s goods.” Id. (quoting Checkpoint
Systems, Inc. v. Check Point Software Techs., Inc., 269 F.3d 270, 301 (3d Cir. 2001)).
Conversely, reverse confusion “occur[s] when a larger, more powerful company uses the
trademark of a smaller, less powerful senior owner and thereby causes likely confusion as to the
source of the senior user’s goods or services. Thus, the ‘junior’ user is junior in time but senior
in market dominance or size.” Id. at 471. Reverse confusion “depends on the overall
commercial strength of the junior user’s mark.” Fancaster, 832 F. Supp. 2d at 407 (citing
Commerce Nat’l Ins. Servs., 214 F.3d at 444; A & H Sportswear, 237 F.3d at 230).
To determine whether there is a likelihood of confusion between two marks, the Third
Circuit has adopted a non-exhaustive ten factor test known as the “Lapp factors.” Lapp, 721
F.2d at 463. The Lapp test is used for trademarks on both competing and non-competing goods, 5
and in direct and reverse confusion cases. A & H Sportswear, 237 F.3d at 212-15; Freedom
Card, 432 F.3d at 472. Logically, though, “economic reality and common sense require that
The Third Circuit has indicated that district courts are not required to use the Lapp factors in situations where
products are directly competing and the marks are very similar. In this scenario, the district court may consider only
the similarity of the marks themselves. See, e.g., Opticians Ass’n, 920 F.2d at 195. Furthermore, when goods
directly compete, the Court may not need to apply every Lapp factor, since the similarity of the marks will be of
high importance. A & H Sportswear, 237 F.3d at 215.
some of the Lapp factors be analyzed differently when reverse [confusion] is at issue.” Freedom
Card, 432 F.3d at 472.
The Lapp factors, as applied in a reverse confusion case, are:
(1) the degree of similarity between the owner’s mark and the alleged infringing
(2) the strength of the two marks, weighing both a commercially strong junior
user’s mark and a conceptually strong senior user’s mark in the senior user’s favor;
(3) the price of the goods and other factors indicative of the care and attention
expected of consumers when making a purchase;
(4) the length of time the defendant has used the mark without evidence of actual
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, competing or not competing, are marketed through the same
channels of trade and advertised through the same media;
(8) the extent to which the targets of the parties’ sales efforts are the same;
(9) the relationship of the goods in the minds of consumers, whether because of the
near-identity of the products, the similarity of function, or other factors;
(10) other facts suggesting that the consuming public might expect the larger, more
powerful company to manufacture both products, or expect the larger company to
manufacture a product in the plaintiff’s market, or expect that the larger company
is likely to expand into the plaintiff’s market.
A & H Sportswear, 237 F.3d at 234. The Lapp factors “are tools to guide a qualitative decision,”
and thus are “not to be mechanically tallied” by the Court or given pre-determined weights in the
Court’s analysis. Id. at 215-16, 234. No one factor is dispositive, and depending on the facts of
a particular case, one or more of the factors may not be probative on the issue of likelihood of
confusion. Id. The Court must weigh and balance the Lapp factors at the summary judgment
stage to determine if a genuine issue of material fact exists as to the likelihood of confusion in a
particular case. Checkpoint Sys., Inc. v. Check Point Software Techs., 104 F. Supp. 2d 427, 457
The Third Circuit explained that there are several factors that should be analyzed in the
same manner for direct confusion and reverse confusion claims:
First, the attentiveness of consumers does not change ([Lapp] factor (3)); in both
direct and reverse confusion, the question is whether this is the kind of product that
consumers will care enough about to notice the differences, or purchase hastily with
only a limited impression. Second, and similarly, the degree to which the channels
of trade and advertisement overlap ([Lapp] factor (7)) should be analyzed in the
same fashion. Finally, Lapp factors (8) and (9), considering the similarity of the
targets of the parties’ sales efforts and the similarity of products, are also analyzed
no differently in the reverse confusion context.
A & H Sportswear, 237 F.3d at 229 (citations omitted). Lapp factors (2), (4), (5), (6), and (10)
may need to be analyzed differently for a reverse confusion claim versus a direct confusion
claim, and these differences will be explored where appropriate as the Court examines each
factor. Id. at 231-34.
1. Similarity of the Marks (Lapp Factor (1))
The “degree of similarity of the marks may be the most important of the ten factors in
Lapp.” Fisons, 30 F.3d at 476. This factor is not necessarily dispositive of the likelihood of
confusion analysis, however. Checkpoint, 104 F. Supp. 2d at 457. “[M]arks need not be
identical, only confusingly similar.” Id. at 477. The marks in this case “are confusingly similar
if ordinary consumers would likely conclude that [‘Simplicity’] and [‘sense and simplicity’]
share a common source, affiliation, connection or sponsorship.” Fisons, 30 F.3d at 476. The
Court’s assessment of the similarity of the marks should include a comparison of the
“appearance, sound and meaning of the marks.” Kos Pharms., 369 F.3d at 713. The Third
Circuit’s “test for such similarity is whether the labels create the same overall impression when
viewed separately.” A & H Sportswear, 237 F.3d at 216 (quotation omitted). In particular, the
court should examine how the marks are presented to consumers. A & H Sportswear, 167 F.
Supp. 2d at 782. Should the overall impression from the marks be “essentially the same, it is
very probable that the marks are confusingly similar.” Opticians Ass’n, 920 F.2d at 195.
First, the Court will examine the similarities and differences between “Simplicity” and
“sense and simplicity” in terms of sight, sound, and meaning. Given that Philips’s tagline “sense
and simplicity” incorporates Hunt’s registered mark “Simplicity” in its entirety, it is clear that
there is at least some degree of similarity in sight and sound between the marks. Hunt’s mark is
typically displayed in ordinary black typeface, with a capitalized first letter, but may also be
displayed in blue or white typeface. (PSMF at ¶ 53; HRSMF at ¶ 53.) In contrast, Philips’s
tagline, “sense and simplicity,” is typically displayed in lowercase sans serif typeface (Gil Sans
MT font), in a distinctive grey and blue color combination. (PSMF at ¶ 79.) Based on this
evidence, the visual impressions of the marks are at least somewhat distinct. See Fancaster, 832
F. Supp. 2d at 412.
Furthermore, even though both marks include the word “simplicity,” Philips’s mark
includes extra syllables, the use of alliteration, and the word “sense” at the beginning of the
mark. This observation leads the Court to consider which part of Philips’s mark, if any is
dominant, and here, the Court finds that Hunt has shown that a genuine issue of material fact
exists. When the dominant parts of the marks at issue are the same, and when the overall
impression created by the marks is essentially the same, “it is very probable that the marks are
confusingly similar.” Opticians Ass’n, 920 F.2d at 195. The parties dispute importance of the
word “sense” to the overall commercial impression of Philips’s tagline. Philips argues that
“simplicity” is a common word, and that Philips’s tagline is intended to evoke a comparison to
the literary and film title “Sense and Sensibility.” (Moving Br. at 18; PSMF at ¶ 91; HRSMF at
¶ 91.) But “sense” is a common word as well, particularly how Philips uses it in its tagline—to
indicate that Philips’s products “make sense” for consumers. See Hunt Control Sys. Inc. v.
Koninkijke Philips. Elec. N.V., 98 U.S.P.Q. 1558 (TTAB 2011). Philips also offers evidence that
consumers remembered Philips’s tagline as “sense and [something else],” when they were able to
recall the tagline at all. (PSMF at ¶ 90.) If, in fact, the word “sense” was a distinctive term, the
fact that it appears first in the tagline may serve to distinguish Philips’s mark from Hunt. There
is sufficient evidence on this record, though, for a reasonable trier of fact to conclude that the
dominant part of “sense and simplicity” is, in fact, the word “simplicity,” given that a major
focus of Philips’s advertising is to show how simple its goods are to use.
This Court “has consistently refused to allow a plaintiff to focus on an abbreviated mark
when analyzing confusing similarity.” Genovese Drug Stores, Inc. v. TGC Stores, Inc., 939 F.
Supp. 340, 346 (D.N.J. 1996). That being said, Hunt offers evidence that Philips used the term
“simplicity” as the only tagline on a variety of occasions as a part of its marketing operations.
(HSSF at ¶ 171; PRHSSF at ¶ 171.) Philips disputes some of those alleged uses, and asserts that
its other uses of “simplicity” were “isolated” or part of a descriptive fair use of the term to
describe Philips products. (PSMF at ¶¶ 94-114.) Furthermore, Philips asserts that many other
companies use the term “Simplicity” in their advertising, including several lighting companies
who have incorporated “Simplicity” into their trademarks or taglines. (Id.) Due to record
evidence of Philips’s use of Hunt’s exact trademark in its advertising, Hunt has raised another
genuine issue of material fact for a trier of fact to consider.
As both parties have used housemarks alongside their trademarks, the Court must also
examine the effects of these housemarks on a consumer’s impressions of similarity between the
marks. “Conflicting marks must be compared in their entirety, including any housemark which
either party appends to its mark.” A & H Sportswear, 167 F. Supp. 2d 770, 780 (citing 4
McCarthy on Trademarks §23:43). A party’s use of a housemark in connection with its mark
may affect the general commercial impression of the mark. See A & H Sportswear, 237 F.3d at
229-30. In a direct confusion case, the presence of a well-known housemark alongside a
trademark may diminish the likelihood of confusion. Id. at 218. Housemarks are treated
differently in the reverse confusion context, however. Although the Third Circuit noted that “not
only is there the possibility that consumers will fail to remember the mark when encountering
[the senior user’s product], but there is also the possibility that the mark will aggravate, rather
than mitigate, reverse confusion by reinforcing the association” of the mark, or part of the mark,
with the junior user, it refused to adopt a per se rule that housemarks are aggravating factors in
reverse confusion cases. Id. at 230.
Philips asserts that both parties made “systematic and prominent use” of their housemarks
in conjunction with their trademarks. (Moving Br. at 17.) Philips in particular offers evidence to
show that it always used the “Philips” housemark with its tagline, and argues that since the
Philips housemark dominated its tagline, that no confusion could have resulted. (PSMF ¶¶ 78,
80.) Philips cites to Fancaster, among other cases, for the proposition that reverse confusion
may not exist where a mark is used merely as a tagline alongside a dominant house mark. See
Fancaster, 832 F. Supp. 2d at 412. Whether Philips’s housemark actually dominated its tagline
should be considered by a trier of fact, given that there is no record evidence establishing that
this claim is undisputed. Furthermore, the presence of the Philips housemark in advertising is
not necessarily the remedy for confusion that Philips describes it as, given that Hunt alleges
reverse confusion in this case. In fact, the Philips housemark may have aggravated reverse
confusion by reinforcing a link between Philips and the word “simplicity.” See A & H
Sportswear, 237 F.3d at 230. For these reasons, Hunt has raised a genuine issue of material fact
as to how the housemarks affect how a consumer would perceive the similarity of the marks.
In April 2011, the TTAB sustained Hunt’s opposition of Philips’s application to register
“sense and simplicity” for various lighting goods. Hunt Control Sys. Inc. v. Koninkijke Philips.
Elec. N.V., 98 U.S.P.Q. 1558 (TTAB 2011). This decision is not binding on this Court (and in
fact the appeal of the TTAB’s decision on Philips’s application is what brought this matter
before this Court in the first place). A & H Sportswear, 237 F.3d at 221. Furthermore, “although
an initial PTO determination by an examining attorney may be considered, it need not be given
weight when the PTO attorney did not review all the evidence available to the District Court.”
Id. The parties have augmented the record available to the TTAB with numerous submissions
before this Court. Therefore, the Court will rely on its own analysis of the marks to make its
likelihood of confusion analysis for the purposes of summary judgment.
Hunt has provided sufficient evidence such that a reasonable trier of fact could find that
the overall commercial impression of the marks are confusingly similar. Hunt points to Philips’s
independent uses of the word simplicity in its marketing, and although Philips disputes the
importance of these uses, they are still on the record before this Court. Furthermore, should
“simplicity” be the dominant portion of Philips’s tagline, consumers are more likely to remember
it, given that the marks will not be viewed side by side. Furthermore, the presence of the Philips
housemark with the “sense and simplicity” tagline could actually aggravate reverse confusion, by
promoting the perception that “simplicity” is associated with Philips. For these reasons, the
Court finds that a genuine issue of material fact exists on the similarity of the marks.
2. Strength of the Marks (Lapp Factor (2))
The second Lapp factor directs the Court to evaluate a mark’s strength by assessing “(1)
the [plaintiff’s] mark’s distinctiveness or conceptual strength (the inherent features of the mark)
and (2) its commercial strength (factual evidence of marketplace recognition).” Freedom Card,
432 F.3d at 472. The Lanham Act provides greater protection to stronger marks, given that
stronger marks will likely have greater consumer recognition. A & H Sportswear, 237 F.3d at
222 (citing Versa Prods. Co., Inc. v. Bifold Co. (Mfg.) Ltd., 50 F.3d 189, 203 (3d Cir. 1995), cert.
denied, 516 U.S. 808 (1995)). “‘Strong’ marks are given “strong” protection—protection over a
wide range of related products and services and variations on visual and aural format. . . .
Conversely, relatively weak marks are given a relatively narrow range of protection both as to
products and format variations.” 2 McCarthy on Trademarks § 11:73. Furthermore, the
presence of a commercially strong junior mark, along with a conceptually strong senior mark,
favor the senior user on this factor. A & H Sportswear, 237 F.3d at 234. The Court will examine
each facet of a mark’s strength in turn.
a. Distinctiveness/Conceptual Strength
Courts often use a four-part spectrum to classify trademark distinctiveness: (1) arbitrary
or fanciful; (2) suggestive; (3) descriptive; and (4) generic. A & H Sportswear, 237 F.3d at 221
(citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). Arbitrary or fanciful
marks “use terms that neither describe nor suggest anything about the product; they bear no
logical or suggestive relation to the actual characteristics of the goods.” Id. (quotation and
citation omitted). A consumer must use “imagination, thought, or perception” to determine what
a product bearing a suggestive mark may be. Id. at 221-22 (quoting A.J. Canfield Co. v.
Honickman, 808 F.2d 291, 297 (3d Cir. 1986)). A descriptive mark gives the consumer an idea
of the product’s ingredients, qualities, or features. Id. at 222 (citation omitted). Generic marks
are marks that operate “as the common descriptive name of a product class.” Id. (citation
omitted). To qualify for protection under the Lanham Act, a mark must be arbitrary, fanciful,
suggestive, or descriptive with secondary meaning—generic marks receive no protection, and in
fact may not be registered as trademarks. Id. (citation omitted).
“Although the conceptual strength of a mark is often associated with the particular
category of ‘distinctiveness’ into which a mark falls (i.e., arbitrary, suggestive, or descriptive),
that is not the only measure of conceptual strength.” Id. Arbitrary or suggestive marks may in
fact be “weak” marks, especially when used on a range of different products or by a large
number of competitors. Id. Thus, the distinctiveness classification spectrum described above
may be useful in determining a mark’s conceptual strength in some situations, but is certainly not
dispositive. See id. A mark’s conceptual strength should be analyzed in the same manner for
direct and reverse confusion cases, with conceptually strong marks weighing in favor of the
trademark holder. Id. at 232.
Hunt has offered evidence such that a reasonable trier of fact could find that the
“Simplicity” mark is suggestive, at best. A consumer must use “imagination, thought, or
perception” to determine what a product bearing a suggestive mark may be. Id. at 221-22
(quoting A.J. Canfield, 808 F.2d at 297). “Simplicity” is not literally descriptive of Hunt’s
products, but it does describe a quality Hunt seeks to associate with its products. In addition,
Hunt’s registration of “Simplicity” with the PTO indicates that the mark is not descriptive
without secondary meaning or generic, given that registration is reserved for distinctive marks.
See A & H Sportswear, 167 F. Supp. 2d at 790. Furthermore, registration serves as prima facie
evidence of the validity of a mark, meaning that Hunt “is entitled to a strong prima facie
presumption that its registered mark is either not merely descriptive or if descriptive, that
secondary meaning is presumed, which amounts to the same thing.” 15 U.S.C. § 1115(a); 2
McCarthy on Trademarks § 11:43. On the balance, Hunt’s mark is likely suggestive. But this
determination does not end the Court’s examination of the mark, given that a mark’s weakness
may be measured in other ways.
Philips asserts that Hunt’s mark “Simplicity” is conceptually weak, because Hunt
promotes its “Simplicity” products in a descriptive fashion: Hunt’s products offer “simplicity”
and are simple to understand. (PSMF at ¶ 26.) Furthermore, Philips highlights significant thirdparty usage of the mark “Simplicity” by other companies, both in and beyond the lighting
industry. (PSMF at ¶¶ 94-114.) In particular, Philips points to evidence showing that lighting
companies EiKo, Cooper, Legrand, and Traxon distributed over 300,000 items containing the
mark “Simplicity” through print or the Internet. (PSMF at ¶¶ 95-96, 98-99, 103-04, 106-07.)
Furthermore, there is no documentation of confusion from any of these third-party uses of
“simplicity.” (Id.) “[A]s a general rule, widespread use of even a distinctive mark may weaken
the mark.” Citizens Fin. Grp., 383 F.3d at 123 (citing Petro Stopping Ctrs., L.P. v. James River
Petroleum, Inc., 130 F.3d 88, 93-94 (4th Cir. 1997).
Hunt has offered sufficient evidence such that a reasonable trier of fact could use to
conclude that its mark is distinctive. Philips offers compelling evidence to show that the
“Simplicity” mark has been weakened by extensive third-party use, but, as noted above, even
weak marks may be entitled to some protection under the trademark laws.
b. Commercial Strength
In a reverse confusion case, “the lack of commercial strength of the smaller senior user’s
mark is to be given less weight in the [Lapp] analysis because it is the strength of the larger,
junior user’s mark which results in reverse confusion.” A & H Sportswear, 237 F.3d at 231
(citing Commerce Nat’l Ins. Servs., 214 F.3d at 444). Thus, “a court should analyze the
‘commercial strength’ factor in terms of (1) the commercial strength of the junior user as
compared to the senior user; and (2) any advertising or marketing campaign by the junior user
that has resulted in a saturation in the public awareness of the junior user’s mark.” Id. (citing
Fisons, 30 F.3d at 474, 479).
The parties do not dispute that there is a significant disparity in the relative economic
power of the parties: Philips is a multinational corporation employing approximately 47,000
people in its lighting business, and Hunt is a small business. (Elsten 6/22/15 Expert Report at 36.) Philips argues that its larger size is not dispositive on this factor, as in this case, larger size
may not necessarily overcome the conceptual weakness of Hunt’s “Simplicity” mark. Philips
offers evidence that Hunt has declared itself a leader in the lighting industry and has been
participating in the lighting market for a long period of time through an established set of
distributors and dealers, thus ensuring Hunt’s industry-wide reputation. (PSMF at ¶¶ 20-22.)
Furthermore, Hunt’s CEO Glaser is the current president of the Lighting Controls Association,
and has held that position in the past. (PSMF at ¶ 24.)
The Court will next examine the advertising campaigns of the parties. Philips began its
“Simplicity Brand Campaign” in 2004, and spent millions on advertising the “sense and
simplicity” tagline in the United States between 2004 and 2007. (PSMF ¶¶ 88-89.) From 2004
to 2007, Philips spent $25.9 million on advertising related to the tagline at issue. (Elsten 6/22/15
Report at 30.) Philips has stated that it has spent over $100 million on advertising related to the
“sense and simplicity” tagline to 2009. (Testimonial Decl. of Terry Fassburg; Elsten 6/22/15
Report at 30.) In comparison, between 2003 and 2013, Hunt spent about $1.68 million on
advertising. (Elsten 6/22/15 Report at Ex. 9.2.)
Although Philips clearly spent more money on advertising than Hunt, it asserts that its
campaign did not successfully saturate the market. In market research conducted by Philips in
2005 and 2006, only about three percent of respondents who had seen Philips’ advertising
spontaneously associated “simplicity” with Philips. (PSMF ¶ 90.) Furthermore, in November
2006, only about 1 percent of respondents claiming to be familiar with Philips could, without aid,
correctly recall the full Philips tagline “sense and simplicity,” and only two percent of
respondents gave a partially correct tagline. (Id.)
Hunt asserts other findings from Philips’s marketing survey in support of its position that
Philips did, in fact, saturate the market with its advertising. For example, when aided, 37% of
respondents “very familiar” with Philips associated the brand statement “This brand stands for
simplicity” with Philips. (Id.) Furthermore, 32% of core target customers remembered the
Philips brand promise “sense and simplicity,” when aided. (Id.)
Whether Philips succeeded in saturating the market is a clear factual issue, and Hunt has
put sufficient evidence on the record such that a trier of fact could find in favor of Hunt.
This Lapp factor favors the senior user in the situation where a commercially strong
junior user adopts a conceptually strong mark. Philips may have significantly more commercial
strength than Hunt, although Philips’s level of market saturation with its tagline is disputed by
the parties. The evidence offered by Hunt indicates that its mark is suggestive at best, and that it
is not a particularly strong mark, given the significant third-party usage—even in the lighting
industry. That being said, Hunt has offered evidence sufficient such that a reasonable trier of
fact could find in favor of Hunt on this factor.
3. Price of Goods, Sophistication of Purchasers, and
Attention Expected of Reasonable Customers (Lapp
On this factor, a trier of fact must determine whether consumers will care enough about
the products at issue to distinguish between them, or if the products are purchased when
consumers have a limited impression of them. Fisons, 30 F.3d at 476 n.12. “As common sense
dictates, the law provides that confusion is unlikely if the products or services at issue are
complex and expensive, the purchasers highly sophisticated, and the purchase process one that is
lengthy and requires close attention and analysis by the purchasers.” Checkpoint, 104 F. Supp. 2d
at 460 (citations omitted).
Philips offers evidence to show that the purchasers of the competing products are
sophisticated and give careful attention to the purchase of lighting products. Philips notes the
process of selecting lighting controls may be lengthy and complex. (PSMF at ¶ 40.) In addition,
Philips asserts that electrical contractors are sophisticated purchasers, given that contractors must
have strong knowledge about electrical products and suppliers to effectively bid for projects.
(PSMF ¶¶ 39-40; see GB Elec. Inc. v. Thomas & Betts Corp., No. 95C0426, 1995 WL 795660, at
*6 (E.D. Wis. July 28, 1995)). Glaser has discussed the complexities of even basic dimming
systems in an article entitled “Dimming Protocols Explained.” (PSMF ¶¶ 44, 49.) Part of the
complexity of dimming systems is that wallbox dimmers must be matched to appropriate
components, for the systems to operate properly and to avoid damage to the dimmer. (PSMF ¶
48.) Philips also notes that Hunt wallbox dimmers are not sold at retail, start at a $100 price
point, and may not be returned. (PSMF at ¶¶ 33-34, 46.) Finally, Philips cites to testimony from
a former Hunt employee indicating that Hunt’s policy was to steer individual consumers away
from Hunt products, since Hunt mostly sold commercial dimmers. (PSMF at ¶ 47.)
Hunt asserts that its wallbox dimmers priced at $100 are “relatively inexpensive wallbox
dimmers,” and thus that Philips’s factual premise that Hunt’s products are very expensive is
flawed. (Opp. Br. at 18.) In support of its argument, Hunt offers the expert report of James V.
Cody, who has significant experience in the lighting industry [Docket Entry 199-19]. Cody
explains how the sophistication of the consumers in the lighting industry actually favors Hunt,
given that experienced consumers in lighting oftentimes know that invisible vertical relationships
exist between larger and smaller suppliers. (HSSF at ¶ 166.) Hunt supports Cody’s conclusions
by pointing out that Philips has engaged in this sort of vertical relationship with several smaller
businesses, such as Genlyte, where Philips phased in its trademarks slowly, over a period of
years. (PSMF ¶¶ 16-19.)
Hunt does not cite to the record to support its assertion that its $100 wallbox dimmers are
“relatively inexpensive,” and the other evidence on the record leads the Court to the conclusion
that purchasers of these products are sophisticated. The effects of the sophistication of
consumers, however, are disputed. Hunt raises a genuine issue of material fact as to what the
effects of vertical relationships between lighting manufacturers would be on the likelihood of
confusion in this case.
4. Actual Confusion and Length of Time without
Actual Confusion (Lapp Factors (4), (6))
Lapp factors (4) and (6) require the Court to determine the length of time, if any, the
mark has been used without actual confusion, and whether the party claiming trademark
infringement can provide evidence that consumers are actually confused by the marks at issue.
These factors are necessarily interrelated, and the Court will examine them together.
Any evidence of actual confusion between the parties is significant to this analysis and is
highly probative of likelihood of confusion, but such evidence is neither necessary nor
determinative to find likelihood of confusion, given the potential difficulties of collecting
evidence of actual confusion. Sabinsa Corp. v. Creative Compounds, LLC, 609 F.3d 175, 187
(3d Cir. 2010); Checkpoint, 104 F. Supp. 2d at 460-61; Versa, 50 F.3d at 205; see also Fisons, 30
F.3d at 476. The “most relevant evidence of actual confusion is the testimony of a reasonably
prudent purchaser who was in fact confused by defendant’s trademark.” Checkpoint, 104 F.
Supp. 2d at 464 (internal quotations omitted). Courts should view actual confusion evidence
collected by a party’s employees with skepticism, because of the tendency for such evidence to
be self-serving or biased, and because of the inability to cross-examine the allegedly confused
consumers. Citizens Fin. Grp., 383 F.3d at 122 (citing Checkpoint, 269 F.3d at 298; A & H
Sportswear, 237 F.3d at 227).
Philips asserts that no actual confusion has occurred over the past nine years, either from
2004 to 2007 when Hunt used “Simplicity” for its dimming panels, or after 2007 when Hunt
began using “Simplicity” on its wallbox dimmers as well. (PSMF ¶¶ 114, 117, 127.) Philips
points to a lack of evidence that any person who purchased a Hunt product believed (1) that
Philips either owned or now owns Hunt, (2) that the companies are related in any way, or (3) that
Hunt needed to license or otherwise obtain permission from Philips to use the term “Simplicity.”
(PSMF ¶ 129.)
Furthermore, Philips also asserts that Hunt’s failure to conduct a likelihood of confusion
survey, when it had the financial means to do so, may lead to the inference that the results of
such a survey would be unfavorable to Hunt, as the trademark holder. (Moving Br. at 15.)
Philips argues that Hunt had the means to run a survey, since it retained three experts in this
litigation and conducted eight depositions. (PSMF ¶¶ 130, 148.)
Hunt counters by offering a “business survey” conducted and designed by Glaser, that
purportedly demonstrates a qualitative likelihood of confusion [Docket Entries 199 Exs. G-H].
This survey consists of a questionnaire of 30 head of household consumers over the age of 18.
The survey asked consumers to compare pictures of products labeled with the respective marks
at issue in this action, side by side, and to determine the origin of the marks. (Docket Entry 199
Ex. G.) There are numerous problems with this survey that affect its admissibility and relevance
to this litigation. From the evidence Hunt has presented with respect to this survey, the Court
cannot determine if Hunt even polled its actual or potential customers. Furthermore, Glaser does
not claim to be an expert in designing consumer trademark surveys, or indeed to have any
experience in the design of surveys. There is no indication that this survey accounted for
marketplace conditions, or that it surveyed consumers looking to buy relevant lighting products.
For these reasons, Glaser’s “business survey” is inadmissible, and Hunt has offered no other
evidence to negate the adverse inference from Hunt’s failure to present survey results on the
likelihood of confusion.
Hunt also attacks the surveys offered by Philips; many of these objections are addressed
in the sections above. Hunt offers the expert report of Dr. Michael Rappeport, which critiques
the reports of Barone and Simonson [Docket Entry 199 Ex. DDD]. In its analysis section, the
Rappeport report does not cite to authorities that are typically relied upon by survey experts.
Furthermore, Rappeport’s criticism of the Barone and Simonson reports would have been aided,
perhaps significantly, by a demonstration that Rappeport’s suggested methodology would have
given different results on the issue of likelihood of reverse confusion. See, e.g., Whirlpool
Props., Inc. v. LG Elecs. U.S.A., Inc., No. 1:03-cv-414, 2006 WL 62846, at *3 (W.D. Mich. Jan.
10, 2006). As discussed in detail in this Court’s review of Hunt’s Daubert motions, the weight
that should be given to the Barone and Simonson surveys will be addressed at trial. The
statements in the Rappeport report do not change the Court’s conclusions on the admissibility of
the Barone and Simonson reports.
Most importantly, Hunt disputes Philips’s assertions that no actual confusion has
occurred, and offers evidence of consumers experiencing actual confusion. Hunt focuses on two
alleged instances of actual confusion: (1) conversations held between Glaser and individuals
visiting Hunt’s booth at Lightfair in 2007; and (2) an online post at a FixYa.com forum devoted
to Philips dimmers, where a Hunt dimmer consumer asked for help.
Hunt asserts that Glaser encountered an unidentified regional sales manager from
Leviton, a competing lighting company, at his marketing booth at the 2007 Lightfair marketing
event held in New York City. (HRSMF at ¶¶ 123-26.) During this encounter, the Leviton
representative teased Glaser about Philips’s tagline, noting the similarity between “sense and
simplicity” and Hunt’s trademark. (HRSMF at ¶ 123.) Glaser acknowledges that, if the Leviton
representative actually had any misconceptions about the relationship between Hunt and Philips
at that time, Glaser was able to dispel confusion. (HRSMF at ¶¶ 118-26.) Hunt offers no
corroboration of this event, and cannot even offer the name of the Leviton representative as
Hunt also points to documented evidence of at least one Hunt dimmer customer who
requested help for a product on a FixYa.com forum devoted to Philips dimmers. (HRSMF at ¶
127.) Philips notes that the FixYa.com post that Hunt points to as evidencing confusion does not
mention “sense and simplicity” or “Simplicity.” (PSMF at ¶ 127.)
Hunt has presented evidence of instances of actual confusion on the record, however
weak or uncorroborated. Despite Philips’s objections that Hunt failed to conduct an admissible
likelihood of confusion survey, the weight that should be given to the actual confusion evidence
offered by Hunt should be determined by a trier of fact. The Court notes, though, that it is not
overwhelmed by the strength of the evidence on actual confusion brought by Hunt in this case,
given the uncorroborated nature of the Lightfair evidence, as well as the scant facts presented
surrounding the FixYa.com forum post.
5. Intent of Philips in Adopting “sense and simplicity”
as a Tagline (Lapp Factor (5))
For forward confusion cases, the Lapp analysis includes an assessment of “whether the
defendant adopted a mark with the intent of promoting confusion and appropriating the prior
user’s good will.” Fisons, 30 F.3d at 479. “When reverse, rather than direct, confusion is
alleged, ‘intent to confuse’ is unlikely to be present. However, though perhaps unusual, should
an intent to confuse exist, it would be relevant to the likelihood of confusion analysis in the same
manner as it would for a direct confusion claim.” A & H Sportswear, 237 F.3d at 232 (internal
citation omitted). In a reverse confusion case, the trier of fact typically assesses whether the
junior user “deliberate[ly] inten[ded] to push the senior user out of the market.” Freedom Card,
432 F.3d at 479. “[M]ere carelessness, as opposed to deliberate intent to confuse . . . does not
shed any light” on whether confusion is likely in a reverse confusion case. A & H Sportswear,
237 F.3d at 232-33. Furthermore, “mere knowledge of the existence of a competitor’s mark is
insufficient to prove bad faith.” Fancaster, 832 F. Supp. 2d at 418 (quotation and citation
omitted). The Court need not find that Philips has intentionally infringed Hunt’s mark to find
overall likelihood of confusion, however. Checkpoint, 104 F. Supp. 2d at 465 (citing Lois
Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 875 (2d Cir. 1986)).
Philips argues that there is no evidence on the record that Philips attempted to drive Hunt
out of the lighting market. Furthermore, Philips asserts that Hunt has not presented evidence to
show that anyone at Philips who was involved in the selection or approval for the “sense and
simplicity” tagline knew about Hunt or its use of “Simplicity” as a trademark. In fact, Philips
has cooperated with Hunt to ensure that Hunt’s dimmers are compatible with Philips LED driver
and ballast products. (PSMF at ¶¶ 69-70.) Philips Advance also lists Hunt Dimming dimmers in
its compatibility guide, which lighting professionals use to select dimming controls that are
compatible with Philips Advance ballasts and dimmers. (PSMF at ¶ 70.) Philips also gave Hunt
permission to refer to Philips’s registered trademarks when promoting products compatible with
Philips Advance products. (PSMF at ¶ 70.)
Hunt conversely argues that Philips acted in bad faith in its adoption of the “sense and
simplicity” tagline, for a variety of reasons. Hunt asserts that Philips incontrovertibly knew of
Hunt’s role in the lighting industry prior to 2004, when Philips adopted the “sense and
simplicity” tagline. (HRSMF at ¶ 73.) Also, Glaser asked Philips to stop using the term
simplicity before Hunt filed its TTAB opposition, yet Philips continued to use the “sense and
simplicity” tagline for several years. 6 (HSSF ¶ 170.) Furthermore, Hunt offers evidence to show
that, despite the fact that the TTAB sustained Hunt’s objections to the extension of registration
for Philips’s “sense and simplicity” tagline as to certain products, Philips continued to use the
tagline on lighting goods, including goods identical in use to Hunt’s goods, for years. (HSSF ¶¶
The parties clearly dispute whether Philips intended to push Hunt out of the lighting
goods market through its use of “sense and simplicity.” Philips’s evidence of actual
collaboration with Hunt to ensure compatibility of goods is compelling on this issue. In addition,
Hunt offers no evidence that the Philips personnel who developed, selected, and cleared the
“sense and simplicity” tagline knew about Hunt or Hunt’s “Simplicity” trademark, nor that
Philips chose the tagline with Hunt in mind. Although Hunt allegedly used its “simplicity”
trademark as early as 1991, it did not attempt to register the trademark until 2004. (PSMF ¶¶ 50-
The parties dispute whether this evidence, along with other evidence from conversations between Glaser and
Philips prior to the filing of this lawsuit, are admissible.
52.) Even if Philips had known about Hunt’s trademark, however, this fact on its own would be
insufficient to establish that Philips acted in bad faith. See Fancaster, 832 F. Supp. 2d at 418.
Furthermore, Philips’s continued use of “sense and simplicity” after Hunt’s demand, and even
after the TTAB’s decision may not necessarily be indicative of bad faith, given that
“[i]nfringement is not willful if the defendant might have reasonably thought that its proposed
usage was not barred by the statute.” SecuraComm Consulting, Inc. v. Securacom Inc., 166 F.3d
182, 188 (3d Cir. 1999) (quotation omitted); see also id. at 189 (“A defendant’s refusal to cease
using a mark upon demand is not necessarily indicative of bad faith.” (citation omitted)). Given
the widespread third-party usage of “simplicity” in trademarks on lighting goods, Philips has
shown that it did not act in bad faith in adopting its tagline. Philips’s actions in general do not
rise to the level of “purposeful manipulation of the junior mark to resemble the senior” mark. A
& H Sportswear, 237 F.3d at 225-26. On this factor, Hunt has not presented sufficient evidence
such that a reasonable trier of fact could find that Philips has acted in bad faith.
6. Marketing Channels, Sales Efforts and Targeting of
Consumers, Relationship of Services in the Minds of
Consumers, and Other Relevant Factors (Lapp
Finally, the Court will consider Lapp factors (7), (8), (9), and (10) together, as the factual
disputes are related in this case since at least some of the goods produced by Philips and Hunt
compete. The seventh Lapp factor considers whether Philips and Hunt sell their products
through overlapping or the same channels of trade. The eighth Lapp factor considers whether the
parties target the same consumers with their sales efforts, given that “when parties target their
sales efforts to the same consumers, there is a stronger likelihood of confusion.” Checkpoint,
269 F.3d at 289. For the ninth Lapp factor, the Court must determine whether the products
offered under the “Simplicity” and “sense and simplicity” marks are “similar enough that a
consumer could assume they were offered by the same source.” Kos Pharms., 369 F.3d at 723
(quotation and citation omitted). Finally, Lapp factor (10) “is necessarily transformed in the
reverse confusion context to an examination of other facts suggesting that the consuming public
might expect the larger, more powerful company to manufacture both products, or expect the
larger company to manufacture a product in the plaintiff’s market, or expect that the larger
company is likely to expand into the plaintiff’s market.” A & H Sportswear, 237 F.3d at 234.
These categories are important to the likelihood of confusion analysis in this case, because
likelihood of confusion must be determined with respect to the actual marketplace conditions,
based on the respective marks and how they are used on the relevant goods and services that
consumers encounter. See, e.g., Giant Food, Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565,
1569 (Fed. Cir. 1983). The Third Circuit noted that Lapp factors seven, nine and ten are not
apposite for determining whether a likelihood of confusion exists in actions between direct
competitors because “[b]y definition, the goods are competing, their function is the same, and the
senior and junior user are already in each other's markets.” A & H Sportswear, 237 F.3d at 212.
Hunt acknowledges that it directly competes with Philips in the lighting market, although
Philips sells far more types of lighting goods than Hunt does. Philips and its subsidiaries sell
lamps, ballasts, and LED drivers and modules, among other products. (PSMF at ¶¶ 2, 4, 11-12.)
Philips does sell dimming controls, but these sales account for less than 1 percent of Philips’s
U.S. lighting sales and go through professional channels. (PSMF, at ¶¶ 14-15, 45.) Hunt
manufactures architectural dimming systems and other types of lighting controls, among other
products. (HRSMF at ¶¶ 20-22, 30.) Hunt sells products through electrical distributors and sales
representatives primarily to commercial users. (HRSMF at ¶¶ 36-37, 45-47.) As to Lapp factor
(8), Hunt asserts that the marketing targets of the parties are virtually identical, and that the
parties target many of the same consumers [Docket Entry 199-19]. Philips does not dispute this
evidence. Based on these facts, Philips asserts that Lapp factors (7), (9), and (10) are neutral and
not consequential to the likelihood of confusion analysis in this case, given that these factors are
generally not apposite for direct competitors. (Moving Br. at 26.) This Court will follow the
reasoning of the Third Circuit in concluding that these factors are apposite to the extent that the
parties are direct competitors.
In its discussion of Lapp factor (10), Hunt raises three additional facts for the Court to
consider: that the TTAB sustained Hunt’s opposition in April 2011; that Philips did not stop
using its tagline until after Hunt countersued; and that all TTAB evidence is admissible and part
of this proceeding, pursuant to 15 U.S.C. § 1071(b). The Court has already addressed the issues
raised by these facts in this Opinion. The Court has examined the TTAB ruling, but is not bound
by it, and has examined all relevant evidence offered by the parties. Furthermore, the issue of
when Philips stopped using its tagline speaks to whether Philips acted in bad faith, and the Court
has already considered this argument in the discussion for Lapp factor (5).
These factors are not outcome determinative, to the extent that the parties compete in the
lighting market. To the extent the parties do not compete, Hunt has put evidence on the record
sufficient for a reasonable trier of fact to find in favor of Hunt on these factors.
As reviewed above, Hunt has demonstrated that numerous genuine issues of material fact
exist for a trier of fact to examine: the similarity of the marks (Lapp factor (1)); the strength of
the marks (Lapp factor (2)); how the sophistication of the consumers affects consumer care in
selecting products (Lapp factor (3)); whether actual confusion has, in fact, occurred (Lapp
factors (4) and (6)); and issues related to the overlap in the parties’ businesses (Lapp factors (7)(10)). Given that Hunt has only failed to demonstrate that a reasonable trier of fact could find
that Philips acted in bad faith in its adoption and use of its tagline (Lapp factor (5)), it would be
inappropriate to grant Philips’s summary judgment motion. Therefore, the Court will deny
Philips’s motion for summary judgment on the issue of trademark liability.
ii. AVAILABILITY OF MONETARY RELIEF AS A REMEDY
The Lanham Act provides for two trademark infringement remedies: injunctive relief and
monetary damages. 15 U.S.C. §§ 1116(a), 1117(a). A trademark owner who demonstrates
likelihood of confusion is entitled to injunctive relief. Lapp, 721 F.2d at 462 (citing 15 U.S.C. §
1114(1)). Most commonly, courts apply injunctive relief pursuant to section 34 of the Lanham
Act, which states that “courts vested with jurisdiction of civil actions arising under this chapter
shall have power to grant injunctions, according to the principles of equity and upon such terms
as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark
registered in the Patent and Trademark Office.” 15 U.S.C. § 1116(a); see also A & H
Sportswear, 166 F.3d at 207-08. The parties do not dispute that, if liability is found on the
likelihood of confusion issue, injunctive relief may be appropriate. (See Moving Br. at 30; Opp.
Br. at 26-27; Reply at 10.)
The Lanham Act also provides that in certain cases, monetary damages may be appropriate:
When a violation of any right of the registrant of a mark . . . shall have been
established . . . the plaintiff shall be entitled . . . subject to the principles of
equity, to recover (1) defendant’s profits, (2) any damages sustained by the
plaintiff, and (3) the costs of the action. The court shall assess such profits and
damages or cause the same to be assessed under its direction. In assessing
profits the plaintiff shall be required to prove defendant’s sales only; defendant
must prove all elements of cost or deduction claimed. In assessing damages the
court may enter judgment, according to the circumstances of the case, for any
sum above the amount found as actual damages, not exceeding three times such
amount. If the court shall find that the amount of the recovery based on profits
is either inadequate or excessive the court may in its discretion enter judgment
for such sum as the court shall find to be just. . . . Such sum in either of the
above circumstances shall constitute compensation and not a penalty. The court
in exceptional cases may award reasonable attorney fees to the prevailing party.
15 U.S.C. § 1117(a). Courts only award monetary damages in trademark cases “in light of
equitable considerations,” and litigants must not be permitted to make excessive demands for
profits. A & H Sportswear, 167 F. Supp. 2d at 801. When an injunction on future use of an
infringing trademark satisfies the equities of a case, courts should deny the award of profits. Id.
1. HUNT’S LOST SALES AND LOST PROFITS
Hunt asserts that it is entitled to compensation for its lost sales and profits, as a result of
Philips’s infringement of the “Simplicity” trademark. As noted above, a trademark owner may
be entitled to the damages it sustained from infringing activities. 15 U.S.C. § 1117(a). But a
party that fails to provide “at least some evidence of harm arising from defendant’s violation”
may not receive an award of profits or damages. Caesars World, Inc. v. Venus Lounge, Inc., 520
F.2d 269, 274 (3d Cir. 1975).
On this issue, Philips offers the declaration and expert report of Laura Stamm [Docket
Entry 190-3]. Stamm found no causal link between the decline in overall sales Hunt experienced
after 2007 and Hunt’s alleged lost sales based on Philips’s use of “sense and simplicity.”
(Stamm 6/22/15 Report, at ¶ 9).
As Hunt’s damages expert Cate Elsten did not review lost sales or profits in her report
[Docket Entry 199-48], Hunt’s only evidentiary support for its lost sales and lost gross margin
claims is the testimony and declaration of Glaser [Docket Entry 199-22]. Hunt does not offer
Glaser as an expert witness, but instead argues that Glaser should be permitted to give lay
testimony on the issue of lost sales under Federal Rule of Evidence 701, because Glaser “knows
his privately-held business the best.” (Opp. Br. at 28-29). Philips objects to Glaser’s
declaration and testimony, because Glaser did not identify any specific examples where Hunt
allegedly lost sales or customers to Philips. Furthermore, Philips challenges Glaser’s testimony
as speculative, and devoid of economic analysis or evidence. 7
Lay testimony under Federal Rule of Evidence 701 is governed as follows:
If the witness is not testifying as an expert, the witness’ testimony in the form
of opinions or inferences is limited to those opinions or inferences which are
(a) rationally based on the perception of the witness and (b) helpful to a clear
understanding of the witness’ testimony or the determination of a fact in issue.
“The modern trend favors the admission of [lay] opinion testimony, provided that it is well
founded on personal knowledge and susceptible to specific cross-examination.” Teen-Ed, Inc. v.
Kimball Int’l, Inc., 620 F.2d 399, 403 (3d Cir. 1980). A witness offering lay opinion testimony
may rely on documents prepared by others in certain situations, so long as the witness’s
testimony is based on his personal knowledge. Lightning Lube Inc. v. Witco Corp., 4 F.3d 1153,
1175 (3d Cir. 1993).
Where a lay opinion is based on at least some valid assumptions, it may be helpful to the
jury. Id. But “[a]n opinion based on false assumptions is unhelpful in aiding the jury in its
search for the truth, and is likely to mislead and confuse.” Id. (citation omitted). For these
reasons, “Rule 701 requires that a lay opinion witness have a reasonable basis grounded either in
experience or specialized knowledge for arriving at the opinion that he or she expresses . . . for
lay opinion as to technical matters such as product defect or causation to be admissible, it must
Philips also notes that Glaser initially answered “I don’t know” at his Rule 30(b)(6) deposition when asked why
Hunt’s sales had declined. (Glaser 11/12/13 Dep. at 259:18-260:19.) Later, Glaser blamed Philips for his lost sales.
(Id. at 309:8-313:8.)
derive from a sufficiently qualified source as to be reliable and hence helpful to the jury.”
Asplundh Mfg. Div. v. Benton Harbor Eng’g, 57 F.3d 1190, 1201 (3d Cir. 1995) (emphasis in
original). The Third Circuit instructs trial courts to “rigorously examine the reliability of the lay
opinion by ensuring that the witness possesses sufficient special knowledge or experience which
is germane to the lay opinion offered.” Id.
Although expert testimony under Federal Rule of Evidence 702 requires a “greater level
of scrutiny” than lay opinion evidence, the trial judge should undertake some “judicial
gatekeeping” for lay opinion testimony on technical issues. Id. at 1202. “Allowing a witness,
with first-hand knowledge, to offer a technical opinion which he lacks the necessary knowledge
and experience to make, runs afoul of the requirements of Rule 701,” and a trial court may
exclude evidence otherwise admissible under Federal Rule of Evidence 401, should the witness’s
knowledge and basis for the opinion be insufficient. Id. Therefore, the screening of a lay
opinion witness’s qualifications should proceed as follows:
The judicial Rule 701 screening that we speak of for cases such as this one is not
very different from the screening that attends the ordinary expert qualification
ruling. In determining whether a lay witness has sufficient special knowledge or
experience to ensure that the lay opinion is rationally derived from the witness’s
observation and helpful to the jury, the trial court should focus on the substance of
the witness’s background and its germaneness to the issue at hand. Though
particular educational training is of course not necessary, the court should require
the proponent of the testimony to show some connection between the special
knowledge or experience of the witness, however acquired, and the witness’s
opinion regarding the disputed factual issues in the case.
Id. at 1202 (citation omitted). The question of “[w]hether a witness is ‘qualified’ to offer opinion
testimony is committed to the discretion of the trial court.” Eichorn v. AT&T Corp., 484 F.3d
644, 650 (3d Cir. 2007)
Under Rule 701, the Court must undertake at least some judicial gatekeeping to assess
whether Glaser’s opinion on lost sales and lost profits is admissible. Therefore, the Court will
consider Glaser’s background as it applies to the economic predictions he has offered to the
Court, to determine if he is sufficiently qualified to offer this opinion as lay testimony. Glaser is
not required to have specific educational training, but Hunt must demonstrate some connection
between special knowledge or experience Glaser possesses and Glaser’s opinion on lost sales.
On this point, Hunt notes that Glaser is the president and sole owner of Caribe
Corporation, a holding company which operates Hunt Control Systems, Inc., Hunt Dimming,
Hunt Electronics, Simplicity Lighting Solutions, and Diversified Components. (Glaser Decl.,
Docket Entry 199-22, at ¶ 2.) Hunt offers no justification for why Glaser should be permitted to
offer an economic opinion about Hunt’s lost sales or profits, beyond the fact that he is familiar
with his own business figures. For example, Hunt offers no evidence that Glaser is familiar with
the calculation of lost sales or profits, or other kinds of economic predictions. Furthermore,
when asked questions about the source of his knowledge about the economic conditions of the
lighting industry, Glaser could only speculate that he had, at some point in time, reviewed
documents reflecting the financial performance of a few companies in the lighting industry.
(Glaser 11/12/13 Dep. 15:8-16:21, 18:22-21:1, 22:20-25:25:15.) Glaser failed to review
publications from consulting groups that focus on the economics of the lighting industry, for
example. (Id.) Based on these facts, Hunt has not met its burden to show a sufficient connection
between Glaser’s knowledge or experience and Glaser’s proposed testimony.
Furthermore, for Glaser’s opinion on lost sales and profits to be admissible, his opinion
must be both rationally based on his perceptions, and helpful to the determination of a fact in
issue. Fed. R. Evid. 701. Glaser’s opinion satisfies neither requirement. First, Glaser provides
no information about any assumptions he may have used in forming his opinion, besides a
general statement that the downward progression of Hunt’s sales in the 2007 to 2010 timeframe
“was beyond what I believe the overall lighting industry experienced.” (Glaser Decl. at ¶ 7.)
Glaser does not indicate any foundation for this statement, besides speculation. When
questioned specifically about the foundation of his knowledge in his deposition, Glaser could not
point to specific documents or sources supporting his testimony that the lighting sector was not
adversely affected by the economic conditions in the United States between 2007 and 2010.
(Glaser 11/12/13 Dep. at 15:14-16:10.)
Second, Glaser’s opinion itself amounts to generalized speculation, and therefore does
not raise a triable issue of fact on the issue of lost sales and lost profits. So far as the Court can
tell from its examination of Glaser’s declaration and accompanying graph, Glaser assumed that
without Philips’s use of “sense and simplicity,” Hunt would have continued to have the same rate
of growth in sales that it had experienced from 2003 until 2006 until the recession hit. Glaser
then opines that Hunt would have experienced a period of no growth in sales during the
recession, and then would have continued to have the same rate of growth it had experienced
before the recession, from the end of the recession until 2013. (Glaser Decl. at ¶ 5.) The Court
cannot find any justification in Glaser’s declaration or testimony to support these findings. Due
to its wholly speculative nature, the Court finds that Glaser’s testimony would not be helpful to a
trier of fact.
The Sixth Circuit has recognized that “seldom will be the case when a lay opinion on an
ultimate issue will meet the test of being helpful to the trier of fact since the jury's opinion is as
good as the witness' and the witness turns into little more than an ‘oath helper.’” Mitroff v.
Xomox Corp., 797 F.2d 271, 276 (6th Cir. 1986). At this stage, Hunt “must present more than
just ‘bare assertions, conclusory allegations or suspicions' to show the existence of a genuine
issue” to justify the denial of summary judgment on this issue. Podobnik v. United States Postal
Serv., 409 F.3d 584, 594 (3d Cir. 2005) (quoting Celotex, 477 U.S. at 325). Hunt has not
satisfied this burden, and therefore the Court will strike Glaser’s declaration and opinion.
Given that Hunt has offered no other evidence on the issue of lost sales and lost profits,
the Court is satisfied that Philips has met its burden to demonstrate that no genuine issue of
material fact exists on this issue. Therefore, the Court will enter judgment in favor of Philips on
the availability of a lost sales or lost profits remedy.
2. DISGORGEMENT/ACCOUNTING OF PHILIPS’S PROFITS
“[A]n accounting for profits [or a disgorgement] is a form of equitable relief, and it does
not follow as a matter of course upon the mere showing of an infringement. It will be denied
where an injunction satisfies the equities of a case, as for example, where there is a clear
showing that no profit was made.” A & H Sportswear, 166 F.3d at 208 (citation and footnote
omitted)). Disgorgement of profits as a remedy is only available “if the defendant is unjustly
enriched, if the plaintiff sustained damages, or if an accounting is necessary to deter
infringement. These rationales are stated disjunctively; any one will do.” Banjo Buddies, Inc. v.
Renosky, 399 F.3d 168, 178 (3d Cir. 2005); see also Marshak, 595 F.3d at 495.
The First Circuit has held that the accounting of profits is inconsistent with a claim of
reverse confusion, given that “[r]everse confusion does not lend itself to any automatic
assumption that there is an equivalence between defendant's profits and plaintiff's diverted
sales.” Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65, 80-81 (1st Cir. 2008) (citing Johnny
Blastoff, Inc. v. L.A. Rams Football Co., 188 F.3d 427, 436-37 (7th Cir. 1999); Big O Tire
Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1374 (10th Cir. 1977);
Restatement (Third) of Unfair Competition § 37 cmt. b (1995) (“in most [reverse confusion]
cases there is no reason to expect that every sale made by the defendant has been diverted from
the plaintiff, or that the profit margins of the parties are necessarily the same.”)).
The Third Circuit has not ruled directly on whether a disgorgement remedy is available to
a trademark holder raising a reverse confusion claim. The parties to this action considered this
issue using the disgorgement framework presented in the direct confusion case Banjo Buddies,
where the Third Circuit outlined six non-exhaustive factors used to determine whether an alleged
infringer’s profits should be awarded to a trademark holder, upon a finding of trademark
These factors include, but are not limited to (1) whether the defendant had the intent
to confuse or deceive, (2) whether sales have been diverted, (3) the adequacy of
other remedies, (4) any unreasonable delay by the plaintiff in asserting his rights,
(5) the public interest in making the misconduct unprofitable, and (6) whether it is
a case of palming off.
Banjo Buddies, 399 F.3d at 175 (quoting Quick Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 349
(5th Cir. 2002) (quotation and internal citations omitted)). The Court will examine each of these
factors in turn, with the caveat that the reverse confusion claims in this case may necessitate
different analysis for some of the factors.
a. Philips’s Intent to Confuse or Deceive
“Knowing or willful infringement consists of more than the accidental encroachment of
another’s rights. It involves an intent to infringe or a deliberate disregard of a mark holder’s
rights.” Securacomm, 166 F.3d at 187. In a reverse confusion case, the Seventh Circuit found
that the intent to trade on a trademark holder’s good will or reputation must be “necessarily
absent in a reverse confusion case.” Sands, Taylor & Wood Co., 978 F.2d at 961.
The relevant facts for this inquiry are the same facts reviewed for Lapp factor (5) above.
As discussed in more detail above, the Court finds that Philips lacked the requisite intent to cause
confusion or deceive customers in adopting its “sense and simplicity” tagline. Philips’s
knowledge about Hunt’s trademark is not sufficient to establish bad faith, nor is Philips’s
continued use of its tagline. Fancaster, 832 F. Supp. 2d at 418; SecuraComm, 166 F.3d at 189.
This factor favors Philips. The Court notes, however, that willfulness is not a
prerequisite finding for recovery under a theory of disgorgement. Banjo Buddies, 399 F.3d at
175. Thus, the Court must consider this factor together with the other factors described in Banjo
Buddies. Sabinsa Corp. v. Creative Compounds, LLC, No. 04-4239, 2011 WL 3236096, at *3
(D.N.J. July 27, 2011).
b. Diversion of Sales
As noted above, the First Circuit has reasoned that “[r]everse confusion does not lend
itself to any automatic assumption that there is an equivalence between defendant's profits and
plaintiff's diverted sales.” Visible Sys., 551 F.3d at 80-81 (citations omitted). This finding is
logical, given the theory of confusion underlying a reverse confusion claim. In a reverse
confusion case, the junior user/alleged infringer is not seeking to benefit from the senior user’s
goodwill. Instead, the harm of reverse confusion is that a consumer may assume that the senior
user’s products are the junior user’s, or alternatively that the junior and senior users are now
connected. Johnny Blastoff, 188 F.3d at 436. This assumption does not lead to the conclusion
that an alleged infringer has necessarily diverted the sales of the senior user. An infringer in a
reverse confusion case causes other types of indirect harm to the senior user, predominantly
related to the devaluation of the trademark through damage to its product identity, corporate
identity, control over its goodwill and reputation, and its ability to enter new markets. Id. at 43637 (citations omitted). For these reasons, the Court will not apply any sort of presumption that
defendant’s profits are equivalent to plaintiff’s diverted sales.
There is no admissible evidence before the Court that Hunt lost sales or profits based on
Philips’s use of the “sense or simplicity” tagline. Other courts have denied disgorgement in
reverse confusion cases where there was no indication that the trademark holder’s mark
contributed to the defendant’s profits. See, e.g., CPC Props., Inc. v. Dominic, Inc., No. 12-4405,
2013 WL 5567584, at * 2 (E.D. Pa. Oct. 9, 2013); A & H Sportswear, No. CIV.A. 94-CV-7408,
2002 WL 27735, at *5 (E.D. Pa. Jan. 9, 2002). For these reasons, this factor favors Philips.
c. Adequacy of Other Remedies for Hunt
The parties dispute whether an injunction would sufficiently remedy any harm Philips
may have done to Hunt. Hunt asserts that an injunction is not adequate because Philips has been
unjustly enriched through its alleged trademark infringement, while Philips argues that an
injunction would be an appropriate remedy since harm to Hunt has not been proven.
Absent proof of “actual harm” such as lost sales or other financial damage, an injunction
is an adequate remedy for trademark infringement. A & H Sportswear, 166 F.3d at 209 (citing
Restatement (Third) of Unfair Competition § 36, cmt. c). For the purpose of examining whether
an injunction would be an adequate remedy in this case, the Court will assume it has found a
likelihood of confusion, and thus that Hunt has demonstrated a likelihood of success on the
merits. Philips voluntarily stopped using the “sense and sensibility” tagline in November 2013,
so presumably Philips would not be harmed should an injunction issue. Also, presumably an
injunction would protect Hunt from harm in the future, should Philips wish to resume use of the
“sense and simplicity” tagline. There is no evidence that Philips has committed fraud, or
engaged in palming off of goods, as will be discussed below. Furthermore, the Third Circuit has
noted that the public interest question in trademark infringement cases is “the interest in
prevention of confusion, particularly as it affects the public interest in truth and accuracy.” Kos
Pharms., 369 F.3d at 730. Imposing an injunction would protect consumers from any further
confusion caused by Philips’s use of its tagline in the future. A permanent injunction would
therefore be both proper and an adequate remedy in this case. See, e.g., Champion Spark Plugs,
Co. v. Sanders, 331 U.S. 225 (1947) (declining to award an accounting of profits, finding that an
injunction would satisfy the equities of the case, where the court found no showing of fraud or
palming off). This factor favors Philips.
d. Hunt’s Unreasonable Delay in Asserting Its
Philips asserts that Hunt delayed unreasonably in asserting its trademark rights, by
waiting over six years after Philips adopted the “sense and simplicity” tagline to assert its
infringement and damages claims. To support this argument, Philips offers evidence that Glaser
is a Philips shareholder and that Hunt knew about Philips’s plans to market its products using
“sense and simplicity” as early as 2005. (PSMF at ¶¶ 38, 71.) In addition, Glaser attempted to
monetize his mark in 2007 by selling his rights to Philips competitors GE, Osram/Sylvania, nonpracticing entity Intellectual Ventures, and other potential intellectual property asset acquirers.
(PSMF at ¶ 115.) Hunt does not dispute these facts.
Hunt argues that it did not delay unreasonably in bringing its infringement and damages
claims, given the small size of its company and its limited resources for litigation. Instead, it
waited to see how the TTAB would rule on its opposition, and until Philips sued. This reasoning
does not satisfactorily explain Hunt’s delay, particularly since Hunt is asking for disgorgement of
profits that accumulated during the six-year period between when Hunt learned of Philips’s plans
to use “sense and simplicity” and when it filed its counterclaim for damages. The Court finds
that Hunt unreasonably delayed its pursuit of these claims, and thus this factor favors Philips.
e. Public Interest in Making Misconduct
A public interest exists in deterring misconduct, particularly where the infringer has
diverted sales and/or engaged in other culpable conduct. See Banjo Buddies, 399 F.3d at 175-76.
It does not follow that the public interest is served by a disgorgement of profits in all cases where
the trademark holder has proven liability for infringement, without examination of the infringer’s
conduct; in effect, automatic disgorgement would serve as a punishment, not a compensation to
the trademark holder. See 15 U.S.C. 1117(a); see also Sabinsa, No. 04-4239, 2011 WL
3236096, at *6 (D.N.J. July 27, 2011). Logically, it follows that the facts of each case must
guide the analysis of this factor, because the public interest is stronger when an infringer has
palmed off or otherwise demonstrated intent to infringe. See Sabinsa, No. 04-4239, 2011 WL
3236096, at *6 (D.N.J. July 27, 2011). Here, Philips has not demonstrate intent to confuse or
deceive, nor has it palmed off, as will be discussed below. The public interest here may be
served adequately with injunctive relief, rather than a punitive order for accounting. For these
reasons, this factor weighs in favor of Philips.
f. Whether Philips was Engaged in “Palming
Off” Its Goods
“Passing off (or palming off, as it is sometimes called) occurs when a producer
misrepresents his own goods or services as someone else’s.” Dastar Corp. v. Twentieth Century
Fox Film Corp., 539 U.S. 23, 27 n.1 (2003) (citations omitted). Typically there will be close
similarities between products, packaging, or marketing in a case of palming off. Banjo Buddies,
399 F.3d at 175-76. The Court is not convinced that this factor applies to the analysis of a
reverse confusion claim for disgorgement, given that Hunt’s theory of confusion requires that
Philips has overwhelmed Hunt’s trademark through extensive marketing of Philips products.
Hunt does not allege that Philips had the intent of making consumers believe that Philips’s
products were actually from Hunt; Hunt alleges that its customers were confused because of
Philips’s alleged infringement of Hunt’s trademark. For Philips to have palmed off its products,
Philips would have had to misrepresent that its products were coming from Hunt, despite the
display of the prominent Philips housemark on products. Hunt offers no evidence that a
reasonable trier of fact could use to support the finding that Philips palmed off, and furthermore,
this theory is counter to Hunt’s reverse confusion allegations. This factor also favors Philips.
An accounting of profits does not automatically follow a finding of infringement.
Damages should be compensation to the trademark holder for infringement, and should not be
awarded merely to serve as punishment of the infringing party. See 15 U.S.C. § 1117(a). The
Banjo Buddies factors should be weighed together in determining whether disgorgement is an
appropriate remedy. Here, all six factors weigh in favor of Philips. Hunt did not offer evidence
sufficient to show that Philips’s actions with respect to the “sense and simplicity” trademark
damaged Hunt, and there is no evidence before this Court to show that Philips was unjustly
enriched by the use of its tagline. In addition, given that “the harm associated with reverse
confusion is that consumers will associate the senior user’s product with the infringing junior
user,” any reverse confusion in this case may have actually increased Hunt’s sales of its products
through consumers’ mistaken beliefs that they had purchased items from Philips, not Hunt. See
A & H Sportswear, No. CIV.A. 94-CV-7408, 2002 WL 27735, at *5 (E.D. Pa. Jan. 9, 2002).
Based on the evidence before the Court, a reasonable trier of fact could not find that Hunt is
entitled to any share of Philips’s profits. For these reasons, the Court will enter judgment in
favor of Philips on the availability of a disgorgement remedy in this case.
3. REASONABLE ROYALTY
Should Philips be found liable for trademark infringement, Hunt also asks the Court to
impose a reasonable royalty onto Philips. “A royalty is a measure of damages for past
infringement,” often used in patent and trade secret disputes, but the use of royalties in trademark
is “atypical.” A & H Sportswear, 166 F.3d at 208. “Even when the courts have awarded a
royalty for past trademark infringement, it was most often for continued use of a product beyond
authorization, and damages were measured by the license the parties had or contemplated.” Id.
at 209 (citing Howard Johnson Co. v. Khimani, 892 F.2d 1512, 1519-20 (11th Cir. 1990);
Ramada Inns, Inc. v. Gadsden Motel Co., 804 F.2d 1562, 1563-65 (11th Cir. 1986); Boston
Prof’l Hockey Ass’n v. Dallas Cap & Emblem Mfg., Inc., 597 F.2d 71, 75-76 (5th Cir. 1979)
(basing reasonable royalty rate on prior negotiations between the parties)). But see Sands, Taylor
& Wood Co. v. Quaker Oats Co. (Sands I), 978 F.2d 947 (7th Cir. 1992); Sands, Taylor & Wood
v. Quaker Oats Co. (Sands II), 34 F.3d 1340 (7th Cir. 1994) (permitting the award of a
reasonable royalty, instead of profits, where no licensing agreement had existed or been
contemplated between the trademark holder and the infringing party, and suggesting the royalty
should be based on the fee paid by another competitor to the trademark holder for the trademark
at issue). The Third Circuit has found that bad faith or a prior licensing agreement could justify
the award of a reasonable royalty in a trademark infringement action, but declined to speculate
on whether other circumstances could also justify such an award. A & H Sportswear, 166 F.3d at
209. Furthermore, imposing a compulsory license on the parties, where neither party had
requested nor negotiated for such a license, is improper. Id. at 208.
Hunt’s evidence and arguments do not persuade the Court that a reasonable royalty
should be available in this case. At the outset, the Lanham Act does not explicitly provide for
the award of a reasonable royalty to compensate a trademark holder for damages in a trademark
infringement action. Hunt suggests that, in A & H Sportswear, the Third Circuit did not bar the
award of a reasonable royalty where a prior license does not exist. 166 F.3d at 208-09. But the
Third Circuit also indicated that most often, a royalty award is granted “for continued use of a
product beyond authorization, and damages [in these cases] were measured by the license the
parties had or contemplated.” Id. at 209. Hunt acknowledges this is not the situation before this
Court. Hunt notes that the Seventh Circuit has directed that a reasonable royalty be awarded in a
reverse confusion case where the parties had not discussed a licensing agreement. Sands I, 978
F.2d at 947; Sands II, 34 F.3d at 1340. That case is not binding precedent on this Court, and
furthermore the royalty directed by the Seventh Circuit in that case was based off the licensing
fee paid by a prior competitor for use of the trademark in the same line of business. Id. Hunt has
not cited evidence in its briefing to show that there is a licensing agreement between the parties,
that the parties negotiated a license at any point, or that Hunt has in fact licensed its trademark to
anyone. For these reasons, Hunt has not shown that a reasonable royalty should be available to
Hunt if should it win the infringement portion of this case, and the Court will enter judgment for
Philips on this issue.
4. CORRECTIVE ADVERTISING
Finally, Hunt seeks damages in the form of corrective advertising to remedy Philips’s
alleged infringement of its “Simplicity” mark. The purpose of corrective advertising is to repair
any damage the infringer may have caused to the mark. See, e.g., Zazu Designs v. L’Oreal, S.A.,
979 F.2d 499, 506 (7th Cir. 1992). The court in Fancaster stated that, for corrective advertising
to be a proper remedy for trademark infringement, the trademark holder “must show that (1) ‘the
confusion caused by the defendant’s mark injured the plaintiff’ and (2) ‘that repair of the old
trademark, rather than adoption of a new one, is the least expensive way to proceed.’”
Fancaster, 832 F. Supp. 2d at 423 (quoting Zazu, 979 F.2d at 506). Corrective advertising
damages are not awarded where the trademark holder has not demonstrated actual damages and
where the alleged infringer has not acted in bad faith. A & H Sportswear, 167 F. Supp. 2d at
801-02; A & H Sportswear, No. CIV.A. 94-CV-7408, 2002 WL 27735, at *64 (E.D. Pa. Jan. 9,
2002); see also Juicy Couture, Inc. v. L’Oreal USA, Inc., No. 04-7203, 2006 WL 1359955, at *2
(S.D.N.Y. May 18, 2006) (finding that an award of corrective advertising is precluded where
trademark holder fails to show lost profits, lost sales, or damage to reputation).
Based on the evidence presented to the Court, Hunt is precluded from receiving a
corrective advertising award. Hunt has not provided admissible evidence as to the damage
Philips’s mark caused to Hunt, since Hunt has not supported its claims to lost profits, lost sales,
or any damage to Hunt’s reputation based on Philips’s use of the “sense and simplicity” tagline.
Furthermore, Philips did not act in bad faith in its adoption or continued use of the tagline. In
particular, the TTAB did not rule on Philips’s request for extension of its international
registration until 2011, and Philips timely appealed that ruling to this Court. Hunt Control Sys.
Inc. v. Koninkijke Philips. Elec. N.V., 98 U.S.P.Q. 1558 (TTAB 2011). To somehow argue that
Philips should have known the result of the TTAB’s ruling (and in fact, that it should be able to
predict the result of this Court’s ruling on its § 1071(b) request) stretches credulity. Hunt has not
attempted to combat any effects it perceives from Philips’s alleged infringement with its own
corrective advertising campaign, which is telling. Hunt’s briefing on this issue cites to no case
law contrary to the Court’s conclusion. For these reasons, the Court finds that Hunt is not
entitled to corrective advertising, and judgment on this issue will be entered in favor of Philips.
For the foregoing reasons, the Court will deny Hunt’s motions to exclude the testimony
and expert reports of Michael Barone and Alex Simonson. Further, the Court will deny Hunt’s
motion for summary judgment. The Court will grant in part and deny in part Philips’s motion for
summary judgment, as described in this Opinion. An appropriate Order will be filed herewith.
s/ Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: June 29, 2016
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