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Fabick, Inc. v. Fabco Equipment, Inc.

United States District Court, W.D. Wisconsin

December 4, 2017

FABICK, INC., Plaintiff,



         This case is set for a jury trial commencing, December 11, 2017, to resolve plaintiff Fabick, Inc.'s remaining claims of trademark infringement against defendants FABCO Equipment, Inc., and JFTCO, Inc. In advance of the final pretrial conference scheduled for December 6, the court issues the following opinion and order on the parties' respective motions in limine. As described below, the parties rehash a number of arguments presented and considered at summary judgment, some of which were raised expressly to avoid waiver. Nonetheless, the court will address each motion in turn.


         I. Plaintiff's Motions in Limine (dkt. #245)

         A. MIL No. 1: Exclude Testimony of Dr. Neeraj Arora

         Plaintiff's first motion seeks to exclude defendants' expert Dr. Neeraj Arora's testimony from trial. The standard for reviewing this challenge is a familiar one, principally governed by Federal Rule of Evidence 702, as elucidated by Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Rule 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.

         In applying Rule 702, a district court is to function as a “gatekeeper, ” determining whether a party's proffered expert testimony is relevant and reliable. Daubert, 509 U.S. at 589; see also United States v. Johnsted, 30 F.Supp.3d 814, 816 (W.D. Wis. 2013) (expert testimony must be “not only relevant, but reliable”). Although “liberally admissible under the Federal Rules of Evidence, ” Lyman v. St. Jude Med. S.C., Inc., 580 F.Supp.2d 719, 723 (E.D. Wis. 2008), expert testimony must, therefore, satisfy the following three-part test:

(1) the witness must be qualified “as an expert by knowledge, skill, experience, training, or education, ” Fed.R.Evid. 702;
(2) the expert's reasoning or methodology underlying the testimony must be scientifically reliable, Daubert, 509 U.S. at 592-93; and
(3) the testimony must assist the trier of fact to understand the evidence or to determine a fact in issue. Fed.R.Evid. 702.

Ervin v. Johnson & Johnson, Inc., 492 F.3d 901, 904 (7th Cir. 2007). Still, “[v]igorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596.

         Plaintiff offers two core, related challenges to Arora's proposed testimony: (1) the testimony is not helpful to the jury because it is on a subject “entirely within the comprehension and common understanding” of the jury; and (2) the testimony “lacks any sort of repeatable, reliable methodology or technique, ” but instead is “based exclusively on unsupported speculation and subjective belief.” (Pl.'s Mot. (dkt. #246) 1.)

         In his report, Arora describes his qualifications and the information he received from the parties and considered in forming his opinions, provides an overview of his understanding of the law governing plaintiff's claims, and then proceeds to analyze the seven factors relevant to the likelihood of confusion element of plaintiff's trademark infringement claims. (Arora's Rept. (dkt. #141).) As an expert witness, Arora will be offering no testimony about his understanding of the law, “overview” or otherwise. The court will address the law, as well as Arora's qualifications in a short narrative before he testifies, and his descriptions of the information he reviewed will be equally brief.

         Contrary to plaintiff's conclusory statement that Arora's opinions are solely based on his subjective, personal opinion about these seven factors, however, the bulk of his analysis under each factor draws on his expertise, including marketing and related literature and studies. In reviewing Arora's report, the court finds the following opinions helpful to the jury and sufficiently supported by Arora's marketing expertise and analysis: the salient parts of the parties' respective marks and, in particular, the relevance of the CAT portion of defendants' mark in arriving at this determination (id. at ¶ 21); the parties' respective methods and channels of advertising (id. at ¶ 31); the degree of care exercise by consumers (id. at ¶¶ 35-40); and the respective strength of the marks (id. at ¶¶ 43-47). (See generally Defs.' Opp'n (dkt. #275) 3 n.1 (citing cases admitting and relying on expert testimony covering similar topics).) With respect to each of these specific opinions, Arora's analysis is distinguishable from the so-called expert opinions in the cases cited by plaintiff, which struck testimony that was not based on specialized knowledge. (Id. at 6-8 (distinguishing cases cited by plaintiff).)

         However, the court agrees with plaintiff that other of Arora's opinions fall short of the threshold established by Rule 702 and Daubert, including: (1) Arora's assessment of the similarity of products (Arora's Rept. (dkt. #141) ¶¶ 25-27), (2) his characterizations of plaintiff's evidence of actual confusion (id. at ¶¶ 51-53), and (3) his conclusion that there was no evidence of an intent of defendant to palm off their products as plaintiff's (id. at ¶ 54.) None of these opinions appear to touch on his expertise or otherwise assist the jury in making this determination, especially purporting to opine on an element of intent normally left to the jury. Equally, defendants fail to develop a specific response to each of these opinions, particularly as to the supposed expertise Arora is able to supply a lay juror in making these judgments. Accordingly, the court will exclude him from offering those opinions, unless defendants can explain at the final pretrial conference how the identified portions of Arora's report draw from his specialized knowledge, and, therefore, would assist the court.

         Plaintiff also challenges Arora's opinions as lacking any reliable methodology, at least without a consumer survey to support them. As defendants point out, however, Arora does explain credibly (if not compellingly) in his report why certain established options for testing the likelihood of confusion do not fit the particular circumstances of this case. (Arora Rept. (dkt. #141) ¶¶ 48-49.) Plaintiff is free to question Arora about his failure to conduct any field studies -- although if plaintiff initiates that line of questioning, it will have opened the door as to the reasons for Arora's opinion that survey options do not fit the facts of this case. Accordingly, plaintiff's motion to exclude Arora's testimony is GRANTED IN PART AND DENIED IN PART. Arora may testify with regard to his opinion as to each of the factors approved above but will be precluded from testifying as to those elements not touching on his specialized knowledge, which, in turn, means that he cannot testify as to the ultimate likelihood of confusion question.

         B. MIL No. 2: Exclude Testimony of Jeffrey Cordray

         Plaintiff also seeks to exclude certain testimony of defendants' damages expert, Jeffrey Cordray. Cordray's opinion was offered in rebuttal to plaintiff's damages expert, Richard Bero. Plaintiff represents that Bero's opinions “related solely to Defendants' sales data as relevant for proof of Defendants' profits damages.” (Pl.'s Br. (dkt. #246) 12.) Plaintiff argues that Cordray's opinion extends beyond any rebuttal to a damages theory based on defendants' profits to opinions concerning plaintiff's sales. Regardless, as plaintiff points out in its motion, to the extent the court strikes a damages theory based on defendants' profits, then Bero's opinions are not relevant, as are Cordray's. The court agrees for the reasons explained below in its ruling on defendants' motion in limine no. 2. Because the court will exclude any damages theory based on defendants' profits, Bero's testimony will be excluded. Accordingly, there will be nothing for Cordray to rebut and plaintiff's MIL No. 2 is DENIED as moot.

         C. MIL No. 3: Bar Prior Use Affirmative Defense

         In this motion in limine, plaintiff seeks an order barring defendants from asserting an affirmative defense based on the John Fabick Tractor Company's prior use of the Fabick mark. While plaintiff acknowledges that the court rejected this argument at summary judgment, and specifically rejected plaintiff's reliance on an opinion by the Trademark Trial and Appeal Board, Noble House Home Furnishings, LLC, 2016 WL 3357265, 118 U.S.P.Q.2d 1413 (T.T.A.B. Apr. 4, 2016), plaintiff seeks review “from an evidentiary perspective in order to preserve Fabick's objection for the record and ensure that there is no waiver.” (Pl.'s Br. (dkt. #246) 12.)

         In addition to repeating its arguments based on Noble House, plaintiff attached another opinion of TTAB, Moreno v. Pro Boxing Supplies, Inc., Opp. Nos. 91214580, 91214877, Cancellation No. 92058878 (T.T.A.B. Sept. 8, 2017).[1] This case is similarly unhelpful since TTAB's discussion solely concerned whether a licensee could rely on the prior use of a licensor. Id., slip op. at p.16-18. In asserting a prior use defense, however, defendants do not rely on a licensing relationship. Instead, as explained at summary judgment, reliance on the John Fabick Tractor Company's superior rights will turn on “whether the John Fabick Tractor Company and JFTCO specifically, or its subsidiaries more broadly, ‘were operated in such a[] way that they appeared to the consuming public as one entity.'” (11/8/17 Op. & Order (dkt. #221) 29-30 (quoting Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336, 340 (Fed. Cir. 1997).) Since plaintiff offers no basis to revisit this view, this motion is DENIED.

         D. MIL No. 4: Bar Unclean Hands and Fraud in the Procurement Defenses

         In this motion, plaintiff again travels ground already explored in the summary judgment briefing, apparently to address the “evidentiary bases” for these defenses, as well as preserve any challenges for appeal. In doing so, plaintiff argues that neither Fabick's initial registration of the trademarks, including Jay Fabick's declaration, nor the later transfer of the marks to J.G. Fabick, L.L.C., are sufficiently related to defendants' infringement to support a finding of unclean hands. First, with respect to the declaration, plaintiff contends that defendants' evidence demonstrates no more than that Jay Fabick knew of and did not believe that the “existence of John Fabick Tractor Company” constitutes a use of the mark plaintiff sought to register. As the court also explained at summary judgment, however, this argument rests on the false premise that defendants' unclean hands and fraudulent procurement defenses depend solely on the existence of the John Fabick Tractor Company, rather than on the use of the FABICK mark itself by that company. (11/8/17 Op. & Order (dkt. #221) 31 (describing defendants' focus on use of “Fabick” rather than “John Fabick Tractor Company” mark); id. at 52-53 (describing defendants' evidence that Jay knew of the use of the “Fabick” mark by the John Fabick Tractor Company).)[2]

         Second, with respect to the transfer of the trademarks to the shell LLC, plaintiff argues persuasively that this action is too attenuated to form the basis for a finding of unclean hands with respect to its acquisition of the mark. As the court indicated in its summary judgment opinion, the court is sympathetic to this argument, and will hear argument at the final pretrial conference. (11/8/17 Op. & Order (dkt. #221) 56.)

         Accordingly, the court will DENY the motion with respect to the defenses premised on Jay's declaration to the USPTO. Since the evidence of the transfer of the trademarks to J.G. Fabick, L.L.C. will be presented to the jury as part of defendants' abandonment defense, the court will RESERVE on its relevance to the unclean hands defense pending oral argument to the court once the jury is deliberating on liability.[3]

         E. MIL No. 5: Bar Abandonment Defense

         Plaintiff further seeks to exclude defendants' abandonment defense under 15 U.S.C. § 1127, whether based on a finding that: (1) the J.G. Fabick, L.L.C., and Fabick, Inc., are “related companies” as defined under 15 U.S.C. § 1127 (and, therefore, Fabick, Inc.'s use of the mark should inure to the benefit of J.G. Fabick, L.L.C.); or (2) there was an implied license between the companies.

         In response, defendants argue that this is an untimely motion for summary judgment, and the court should deny it on that basis alone. Certainly, this motion would have been more easily and efficiently addressed at summary judgment, but no party is obligated to bring every potentially meritorious claim or defense at summary judgment. Moreover, the court will not ask the jury to decide a case on a claim or defense that has no merit. Still, as defendants detail in their opposition, factual disputes here would preclude an adjudication as a matter of law in any event. Indeed, the record at summary judgment was undeveloped as to J.G. Fabick, L.L.C.'s function and relationship to Fabick, Inc., leaving open factual questions, among others, as to: (1) whether an implied license existed between J.G. Fabick, L.L.C., and Fabick, Inc., and (2) whether the two entities are “related companies, ” as that term is defined under § 1127. As such, the court will DENY this motion, but will take up with the parties at the final pretrial conference the nature of plaintiff's rebuttal to this defense.

         F. MIL No. 6: Exclude Evidence Regarding Third-Party Use of FABICK Mark

         In this motion, plaintiff seeks to exclude “any evidence of third party use of the Marks for which [defendants] have no evidence of actual use in commerce by said third parties or the extent of such use.” (Pl.'s Br. (dkt. #246) 24.) As defendants point out in their reply, this dispute may be mostly one of definition, since “use” in websites, for example, appears to constitute “use in commerce, ” without regard to whether the underlying businesses using the name were commercially successful. See Eva's Bridal Ltd. v. Halanick Enters, Inc., 639 F.3d 788 (7th Cir. 2011) (discussing “use” of mark in context of naked licensing challenge); see also 15 U.S.C. § 1127 (defining “use in commerce”). Therefore, while the planned use of the name for a third-party business that never launched would not be material to the jury's determination of likelihood of confusion (or of a naked licensing or failure to control the marks adequately) theory, evidence defendants seek to admit may meet the use in commerce requirement. As ...

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