Commercial Litigation and Arbitration

Internet Evidence Admitted on SJ under 807 — Search Results from Parties’ Websites and Amazon Like to Be Trustworthy Because of Sellers’ Interest in Accurately Representing Products — 12(f) Motions to Strike Disfavored as Way to Avoid Page Limits

Uncommon, LLC v. Spigen, 2018 U.S. Dist. LEXIS 48806 (N.D. Ill. Mar. 26, 2018):

Plaintiff Uncommon, LLC sued Defendant Spigen, Inc. for using the trademarked term "Capsule" in the names of its cell phone cases, the same product that Plaintiff sells under the Capsule mark. Plaintiff brings claims for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and unfair competition under Illinois common law. [1]. Defendant asserts counterclaims seeking cancellation of Plaintiff's Capsule mark for [*2]  genericness and descriptiveness. [47]. Before this Court are Plaintiff's motion to strike Defendant's expert report [104]; Defendant's motion to strike Plaintiff's expert report [107]; Plaintiff's motion to strike an affidavit from Defendant's nontestifying expert [177]; Defendant's motion to withdraw answers to Plaintiff's requests for admission [180]; and the parties' cross-motions for summary judgment [123, 147].

As explained below, this Court denies the parties' motions to strike; partially grants and partially denies Defendant's motion to withdraw answers; and partially grants and partially denies the parties' motions for summary judgment.

I. Background

A. Disputed Facts

The facts in this section come primarily from Defendant's Local Rule 56.1 statement of facts [124] and Plaintiff's Local Rule 56.1 statement of facts [149].1 The parties disagree over many of the circumstances of this case and each filed extensive responses to the other's statement of facts, [152, 157], and statement of additional facts, [169, 171]. Simply denying a fact that has evidentiary support "does not transform it into a disputed issue of fact sufficient to survive a motion for summary judgment." Roberts v. Advocate Health Care, 119 F. Supp. 3d 852, 854 (N.D. Ill. 2015). Denials "must cite specific evidentiary [*3]  materials justifying the denial" or be disregarded. Malec v. Sanford, 191 F.R.D. 581, 584 (N.D. Ill. 2000). Further, responses to the opposing party's statement of facts are not the place for "purely argumentative details," id., or legal conclusions, Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 1997). District courts may disregard any improper denials. See id.; Ammons v. Aramark Unif. Servs., 368 F.3d 809, 817 (7th Cir. 2004).

Plaintiff argues in its reply brief on its motion for summary judgment that many of Defendant's responses to Plaintiff's statement of facts should be disregarded. [168] at 7. But Plaintiff waived this argument by failing to raise it before the reply brief. See, e.g., Padula v. Leimbach, 656 F.3d 595, 605 (7th Cir. 2011). Even so, this Court retains discretion to enforce Local Rule 56.1. See Ammons, 368 F.3d at 817. To the extent that Defendant's responses fail to cite specific evidence in the record, this Court will disregard them and deem Plaintiff's statement of fact to be admitted. See Malec, 191 F.R.D. at 583-84.

The majority of responses that Plaintiff challenges sufficiently conform to Local Rule 56.1 to remain in the record. In most responses Defendant admits the statement in part and disputes the remainder either by citing to the record or re-citing the portion of the record relied upon by Plaintiff. In some responses, Defendant limited its reply because it objected to the form of Plaintiff's statement as containing improper legal argument or as unsupported [*4]  by the evidence. This Court considers this to be the case with respect to Defendant's responses to paragraphs 1-3, 5, 7-10, 15, 16-18, 20, 21, 26, 29-37, and 39-42, and declines to strike those responses. In a few instances, however, Defendant failed to cite to any record evidence: this is true of its responses to paragraphs 6, 14, 23, 25, 28, and 38 of Plaintiff's statement of facts. This Court disregards those denials and considers Plaintiff's corresponding statements admitted. Malec, 191 F.R.D. at 583-84.2

B. This Case

The parties make and sell cell phone cases. PSOF ¶¶ 5, 6. Plaintiff sells a number of case models that consumers can customize with their own images, as well as "ready-made" varieties available with mass-produced designs or licensed artwork. DSOF ¶ 42; R. DSOF ¶ 40.

In September 2012, Plaintiff applied to register the name "Capsule" as a trademark for one of its lines of cases. PSOF ¶ 4. The Capsule mark issued in May 2013 as Trademark Registration No. 4,338,254, for "cases specifically adapted for protection and storage of consumer electronics, namely, cellular phones and mobile media players." Id.; [149-3]. The mark's registration lists its "first use" and "in commerce" dates as December 16, 2009. [149-3]. Its registration date [*5]  is May 21, 2013. Id. Plaintiff sold its first Capsule case in July 2010, and has continuously sold cell phone cases with the mark since that date. DSOF ¶ 32; PSOF ¶ 5.

When Plaintiff registered its mark, it appears that another company, Vatra, Inc., had registered "Capsule" as a trademark for "bags and cases" for "holding or carrying" cell phones, cameras, glasses, and other accessories. [124-8] at 6. Vatra, however, never followed up on its initial registration by providing a certificate of "continued use or excusable non-use," which must be submitted to the U.S. Patent and Trademark Office (USPTO) between the fifth and sixth year after registration to maintain a valid trademark. See id. at 5. In any event, the USPTO cancelled Vatra's Capsule mark in February 2015 for lack of that certificate, id. at 3, and it did not flag Vatra's mark as a potential source of confusion when Plaintiff applied for its Capsule mark, DSOF ¶ 13; [149-3].

There are, however, additional third-party suppliers that sell cases whose names contain the term "Capsule," including Accez, iPhone TPU, Jammylizard, Catalyst, and others. See [124-10]. Plaintiff's own exhibit of online search results for "capsule," submitted with its [*6]  Complaint, shows that case producers (other than the parties here) use the term. [1-6]; [124-9] at 8.3 Such third-party use of Capsule, even in relation to cell phone cases, did not affect Plaintiff's registration of its mark with the USPTO.

Around 2010, Defendant also began selling cell phone cases with the name "Capsule." PSOF ¶ 6. These cases sometimes, but not always, used capsule with other modifiers; for example, Defendant's products include "Air Capsule," "Capsule Solid," and "Capsule Capella." Id. ¶¶ 6, 9; DSOF ¶¶ 53, 54. By November 2014, Defendant had submitted registration applications to the USPTO to trademark these "Capsule family" product names. PSOF ¶¶ 6, 12. At least one of these marks—Capsule Capella—was approved and registered with the USPTO in May 2017. [124-4] at 4; CAPSULE CAPELLA, Registration No. 5,297,564.4 Although the Capsule Capella mark was originally rejected by the USPTO for likelihood of confusion, the objection was withdrawn upon review. [124-4] at 6. The registration for Capsule Capella includes the disclaimer that Defendant makes no claim to the "exclusive right to use 'Capsule' apart from" its appearance in the [*7]  mark as shown. CAPSULE CAPELLA, Registration No. 5,297,564. Defendant's "Rugged Capsule" mark was also initially rejected, both for likelihood of confusion and because the USPTO determined that the mark was "merely descriptive" of an attribute of the Defendant's case. [124-6] at 16-17. Defendant still sells its "Capsule family" cases, on its website and through online retailers such as Amazon and eBay. PSOF ¶ 11.

Defendant also claims that it sold a "Capsule" cell phone accessory in June 2009, predating Plaintiff's first use of the Capsule mark. See R. DSOF ¶ 22; [124-11]. This product was the "SGP Metal Advance Light," which came in a variety of styles, including "Capsule Nickel" and "Capsule Gold." See PSOF ¶ 25; [124-11]. The SGP Metal Advance, however, was a cell phone "skin," a decorative sticker for the front of a phone. PSOF ¶¶ 26-28; [150-5]. It was not a cell phone case. In any event, this use of "capsule" merely described one of the designs in which the sticker was available—specifically, the option to have the sticker in a gold or nickel color with a pattern of repeating medicine capsules. See [124-11, 149-26]. Thus, "capsule" as Defendant used it in 2009 described a [*8]  decorative pattern by naming the objects in the pattern, and was not a product identifier. It has little relevance here.5

Thus, the disputed products consist of Plaintiff's Capsule cell phone cases and Defendant's "Capsule family" cases. Both parties sell their Capsule cases online, through their websites and online retailers. PSOF ¶ 14; [1-6]; [124-28]; [124-34]. Both have a national market. PSOF ¶¶ 13, 14. Both parties use the trademarked term alone and in conjunction with the word "case." [149-11]; [149-19]; [124-12]; [124-28]; R. DSOF ¶ 20; DSAF ¶ 4. Defendant, as noted, also uses the term with other descriptors, and has trademarked at least one of the resulting phrases. See [124-4]; DSAF ¶ 6. The Capsule marks for which Defendant has sought or is seeking registration have first-use dates no earlier than February 2015. DSAF ¶ 6. Defendant briefly ceased selling its Capsule family cases during the pendency of this litigation but has resumed its sales. PSOF ¶ 38.

Although both parties currently sell Capsule cases, Plaintiff does not sell its Capsule models for iPhones after the 5/5s generation, with the exception of the iPhone SE. PSOF [*9]  ¶ 5; R. DSOF ¶¶ 43, 44. The trademarked Capsule models are limited to cases for the iPhone 5/5s, iPhone SE, iPhone 4/4s, and the fourth generation iPod Touch. R. DSOF ¶ 43. Plaintiff's cases for these goods can be customized by consumers or bought with ready-made prints. Id. Plaintiff did not produce Capsule cases for later generations because it was more difficult to print customized designs—generally supplied by consumers—on the cases that fit those generations. R. DSOF ¶ 44. Defendant's challenged cases, by contrast, are not customizable, and appear to be sold primarily in solid colors. DSOF ¶ 50; see also [149-19] (Capsule products on Defendant's website). Also, Defendant sells Capsule family cases for phones other than the iPhone, such as the Samsung Galaxy, see [149-19], while Plaintiff's Capsule models only fit iPhones, see PSOF ¶ 5; R. DSOF ¶¶ 43, 44; [124-2, 124-12, 124-23]. Plaintiff admits that it has no evidence of actual confusion between its Capsule cases and Defendant's cases. R. DSOF ¶ 52.

In December 2015, Plaintiff sued Defendant for federal trademark infringement under 15 U.S.C. § 1114(a); unfair competition and false designation of origin under 15 U.S.C. § 1125(a); and Illinois common law unfair competition. [*10]  [1]. Defendant asserted a counterclaim and numerous affirmative defenses. [31, 47]. Defendant later voluntarily dismissed Counts I and VI of its counterclaim, and this Court dismissed Counts II and V. [54, 61]. Thus, Defendant's remaining counterclaims are Counts III and IV, seeking cancellation of Plaintiff's mark for genericness and descriptiveness, respectively. [47].

The parties engaged in extensive discovery in the course of this litigation, and each consulted experts. In December 2016, Defendant disclosed its experts to Plaintiff. [183-2, 183-5]. It listed Doug Bania as an expert who "may be called to testify regarding the lack of consumer confusion" as to the parties' marks; whether Plaintiff's mark "is descriptive and has acquired distinctiveness"; and damages calculations. [183-5]. Defendant noted that Bania would provide a formal report. Id. Defendant's designation of experts also listed Kirk Martensen as a "non-testifying expert who will conduct a consumer survey" to provide evidence of consumer perspectives on the Capsule mark and the parties. Id. Defendant noted Martensen's association with Goldmarks—his survey firm—and said that although no "formal report" was forthcoming, [*11]  Martensen might "be called to testify on the methodology of the survey if needed." Id. Upon Plaintiff's request, Defendant provided a two-page summary of Martensen's credentials that same month. [157-18, 157-20]. Defendant sent Plaintiff a copy of the survey report, including information about its methodology and findings, with Defendant's expert disclosures. See [124-19] at 3-5, 15-24; [180-1] ¶ 2. Although Plaintiff never sought to depose Martensen, it asked Bania about Martensen and his methodology in a January 2017 deposition. [180-1] ¶ 9; [180-6]. In response, Bania admitted that he is not a survey expert but said that he accepted the reliability of the survey report, in part because it aligned with his own research. See [183-6] at 2.

In January 2017, this Court extended the initial expert discovery cut-off from February 2017 to March 14, 2017. [102]. On March 13, after Plaintiff's expert rebuttal report had been submitted and a day before the close of expert discovery, Bania submitted a "Supplemental Expert Report." [104-3]. Ultimately, this Court again extended expert discovery until June 1, 2017. [114].

The parties cross-filed for summary judgment in June 2017. [123, 147]. Defendant [*12]  included Bania's expert report and Martensen's consumer survey as exhibits in support of its motion. [124-9, 124-19]. In response, Plaintiff challenged the admissibility of the consumer survey. See R. DSOF ¶ 28; [158] at 8. As a result, Defendant submitted a sworn declaration from Martensen in support of the consumer survey with its responses to Plaintiff's statement of additional facts. [171-8]. The affidavit described the work that Martensen and his firm Goldmarks conducted to produce the survey, and attested to the truth and validity of the consumer survey report previously disclosed to Plaintiff and submitted with Defendant's motion for summary judgment. Id.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(f), courts may strike a party's "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Accordingly, courts grant motions to strike only in rare circumstances; they are generally disfavored for their dilatory effect and frequent use as a vehicle to make arguments beyond the page limits of the merits briefs. See Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725, 726-27 (7th Cir. 2006). A motion to strike should succeed when it removes "unnecessary clutter from the case," and thus expedites rather than delays resolution on the merits. Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989).



In citations, "DSOF" refers to Defendant's statement of undisputed facts [124], with Plaintiff's responses [157] cited as "R. DSOF." "PSOF" refers to Plaintiff's statement of undisputed facts [149], with Defendant's responses [152] cited as "R. PSOF." "PSAF" refers to Plaintiff's statement of additional facts [157], with Defendant's responses [171] cited as "R. PSAF." "DSAF" refers to Defendant's statement of additional facts [152], with Plaintiff's responses [169] cited as "R. DSAF." References to additional filings are by docket number.

Plaintiff's reply brief contains additional arguments about other disputed responses by Defendant. See [168] at 8-10. But these overlap with Plaintiff's arguments against Defendant's motion to withdraw certain of its admissions, which this Court addresses later in this opinion. This Court will not consider additional, waived arguments on that issue.

Despite offering its own internet search evidence, see [1-6], [149-19], Plaintiff offers a number of perfunctory hearsay objections to Defendant's internet evidence, without citing to law, see R. DSOF ¶ 11. This Court finds the internet search evidence admissible under Federal Rule of Evidence 807. The internet evidence offered by both sides consists of images of search returns on the parties' websites or retail websites like Amazon, see, e.g., [149-18], [124-22], and is likely to be trustworthy because it is in the seller's interest to accurately represent its products. Additionally, this evidence is more probative on the issue of consumer confusion—an element of trademark infringement—than any other comparable evidence and admitting it will best serve the purposes of the federal rules and the interests of justice. See Fed. R. Evid. 807; see also Peerless Indus., Inc. v. Crimson AV LLC, No. 11-c-1768, 2017 WL 1192805, at *3 & *3 n.6 (N.D. Ill. Mar. 31, 2017) (affirming use of print-out as evidence of public availability of a product); In re Bayer Aktiengesellschaft, 488 F.3d 960, 967 (Fed. Cir. 2007) (internet search results are evidence of the descriptiveness of a mark); 2 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION §§ 11:20, 20:126.50 (5th ed.) (discussing use of internet search results to show descriptiveness and consumer understanding and use of a term).

This Court may take "judicial notice of public records and government documents, including those available from reliable sources on the Internet." Sleeter v. Actavis Totowa, LLC, No. 10-653-GPM, 2010 WL 3781261, at *2 n.1 (S.D. Ill. Sept. 21, 2010) (citing Laborers' Pension Fund v. Blackmore Sewer Constr., Inc., 298 F.3d 600, 607 (7th Cir. 2002)).

Defendant argues that this purported prior use may be grounds for cancellation of Plaintiff's mark. [125] at 13. There are two glaring problems with this argument, as evidenced by the very cases Defendant cites. In Martahus v. Video Duplication Services, the Federal Circuit noted that 15 U.S.C. § 1052(d) supports cancellation on the basis of prior use when the subsequently registered mark "so resembles a mark or trade name previously used in the United States by another, and not abandoned, as to be likely, when used in connection" with the second user's product, to "cause confusion." 3 F.3d 417, 421 (Fed. Cir. 1993). Even if Defendant could show that its use of "capsule" as a decorative sticker was likely to cause confusion with Plaintiff's cell phone case—a doubtful proposition—its single citation to an image of this capsule-patterned sticker, see DSOF ¶ 15, [124-55], does not satisfy Martahus' requirement that cancellation of a registered mark on these grounds rebut the registered mark's presumed validity by a preponderance of the evidence, 3 F.3d at 421.

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