Bach v. Forever Living Products U.S., Inc.

• Decision Date: 06 February 2007
• Docket Number: No. C05-970MJP.,C05-970MJP.
• Citation: 473 F.Supp.2d 1110
• Parties: Richard BACH, et al., Plaintiffs, v. FOREVER LIVING PRODUCTS U.S., INC., et al., Defendants.
• Court: U.S. District Court — Western District of Washington

473 F.Supp.2d 1110

Richard BACH, et al., Plaintiffs, v. FOREVER LIVING PRODUCTS U.S., INC., et al., Defendants.

No. C05-970MJP.

United States District Court, W.D. Washington, at Seattle.

February 6, 2007.

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John Wentworth Phillips, Matthew Geyman, Phillips Law Group, Seattle, WA, for Plaintiffs.

David R. Cross, Quarles & Brady, Milwaukee, WI, Edwin P. Wainscott, Quarles & Brady Streich Lang, Phoenix, AZ, Elizabeth L. McDougall-Tural, Harry H. Schneider, Jr., Susan Donnelly Fahringer,, Perkins Coie, Seattle, WA, for Defendants.

ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT ON PLAINTIFFS' TRADEMARK CLAIMS

PECHMAN, District Judge.

This matter comes before the Court on Defendants' motion for partial summary judgment denying Plaintiffs' trademark claims. (Dkt. No. 69). Plaintiffs oppose the motion. (Dkt. No. 76). Having considered the parties' briefs, including the supplemental briefs, (Dkt. Nos. 125 & 129), as well as all of the documents submitted in support thereof, the Court DENIES Defendants' motion. The Court also DENIES Defendants' motion to exclude the expert survey of Kenneth Hollander. (Dkt. No. 82).

BACKGROUND

This case arises from Defendants' use of the title, character, name, text, and photographs associated with the book Jonathan Livingston Seagull. The book was written by Richard Bach and was published in 1970. The photographs which appear in the book were taken by Russell Munson. Mr. Bach and Mr. Munson are the plaintiffs in this case.

Defendants Forever Living Products U.S., Forever Living Products International, and Aloe Vera of America (collectively "Forever Living Products" or "FLP") are affiliated companies that manufacture and distribute health and beauty products through "direct sales" or "multi-level marketing," in a fashion similar to that used by the company Avon. (Lloyd Decl. ¶ 2). The name "Forever Living Products" also refers to over 150 domestic and foreign affiliated businesses that sell and distribute Forever Living health and beauty products. (Id.). Defendant Forever Resorts provides management services for resorts located in the United States. (Id. ¶ 6). Rex Maughan is the founder, CEO, and President of FLP and is a manager of Defendant Forever Resorts. Rex Maughan also has an ownership interest in substantially all of the 100 + foreign affiliates of Forever Living Products. (Id. ¶ 9).

Plaintiffs allege that Defendants have used a copyrighted photograph from Jonathan Livingston Seagull as their corporate logo, and have used copyrighted excerpts from Jonathan Livingston Seagull, and the copyrighted story and character of Jonathan Livingston Seagull in their advertising, promotional, and training materials, in communications with their independent distributors, in their sale and distribution of FLP products, and in the advertising, marketing and promotion of Forever Resorts recreatioal properties. (Third Am. Compl. ¶ 4). Plaintiffs allege that these uses constitute copyright infringement in violation, of the Copyright Act, 17 U.S.C. § 501.

Plaintiffs also allege that Defendants have falsely represented in commerce that their companies, products, and services are endorsed by or otherwise affiliated or associated with the name, title, and images associated with Jonathan Livingston Seagull and/or Plaintiffs. (Third Am. Compl. ¶ 5). The record is replete with examples of how Defendants used the name and title of Jonathan Livingston Seagull, as well as the image of a white seagull on a blue background, in their written and oral business communications. For example, in a 2003 promotional video, FLP's marketing director stated that FLP's brand is "the Jonathan brand," and that "Jonathan is really the basis of what Forever is about." (Geyman Decl., Ex. 13). FLP has referred to the company logo—a seagull—by the name "Jonathan" or "Jonathan Livingston Seagull" since the company was founded in 1978. (Geyman Decl., Exs. 16-17). For over twenty years, FLP has given "Jonathan" bonuses to successful distributors. (Id., Ex. 18). FLP has given statues of "Jonathan Livingston Seagull" to top-selling distributors, (Id., Ex. 21) called its distributors "Jonathan", (Id., Ex. 22) and held "Jonathan Days" and "Super Jonathan Days" to motivate its distributors (Id., Exs. 19 & 23). Moreover, FLP has used the image of a white seagull on a blue background—an image strikingly similar to the cover of the U.S. edition of the book—on FLP sales folders. (Id., Ex. 29). And in a 2005 "Style Guide", FLP outlined how the same image of a white seagull on a blue background was to be used in FLP signs, flags, and banners. (Id., Ex. 14). Plaintiffs allege that these uses constitute trademark infringement in violation of the Lanham Act, 15 U.S.C. § 1125(a).

Defendants have moved for summary judgment on Plaintiffs' trademark claims. FLP argues that Plaintiffs' trademark claims should be denied for two reasons: (1) the copyright and trademark claims overlap and courts do not allow trademark claims to proceed where copyright provides an adequate remedy, and (2) Plaintiffs cannot establish infringement of their trademark rights.

ANALYSIS

A. Motion to Exclude

Defendants have moved to exclude one of the surveys relied upon by Plaintiffs to show likelihood of confusion.¹ (Dkt. No. 82). Under Fed.R.Evid. 702, expert testimony is admissible 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 the case. Expert testimony is admissible if the expert is qualified to testify on the matters at issue and the testimony is relevant and reliable. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 598, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Under Fed.R.Evid. 403, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. The Ninth Circuit has held that, in the context of consumer confusion surveys, "as long as they are conducted according to accepted principles, survey evidence should ordinarily be found sufficiently reliable under Daubert." Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1143 n. 8 (9th Cir.1997) (quoting E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1292 (9th Cir.1992)). Moreover, "[t]echnical unreliability goes to the weight accorded a survey, not its admissibility." Id. at 1143 (quoting E & J Gallo Winery, 967 F.2d at 1292).

The at-issue survey is an internet survey conducted by Kenneth Hollander that tested 200 individuals who identified themselves as being past, current, or potential multi-level marketing distributors. (Hollander Decl. ¶ 11). The survey respondents were divided into test and control groups. (Id. ¶ 13). Both groups were shown the same visual array depicting the name, title, and cover image of a seagull from the book Jonathan Livingston Seagull. (Id. ¶ 14). The test group was shown a second visual array depicting six examples of FLP's alleged confusing uses of Plaintiffs' marks. (Id. ¶ 15). The control group was shown the same six examples of FLP's uses, except that all references to Jonathan Livingston Seagull and all seagull images were removed. (Id. ¶ 16). All of the respondents were then asked whether they thought "that the corporation that manufactures and distributes Forever Living Products around the world did or did not [or did not or did] get permission from the people who own the rights to Jonathan Livingston Seagull." (Id. ¶ 17). The survey asked a follow-up question to those who answered "did" to the question. (Id. ¶ 19). Thirty-five of the 100 respondents in the test group (35%) and four of the respondents in the control group (4%) thought that FLP had received permission from the owners of the rights to Jonathan Livingston Seagull. (Id. ¶ 22).

Defendants do not challenge Mr. Hollander's qualifications as an expert. Instead, Defendants argue that the survey should be excluded under Rules 702 and 403 because it is not based on reliable survey methods, has no probative value, and will confuse the jury. First, Defendants challenge the relevance of the Hollander survey on the grounds that the survey asked respondents whether they believed that FLP had "permission" to use the JLS marks, rather than "approval" to use the marks. But, as Plaintiffs point out, whether a defendant has permission to use a plaintiff's mark is probative of and relevant to the likelihood of confusion question. See Pebble Beach Co. v. Tour 18 I, Ltd., 155 F.3d 526, 543-44 (5th Cir.1998) ("For a patty to suggest to the public, through its use of another's mark or a similar mark, that it has received permission to use the mark on its goods or services suggests approval, and even endorsement, of the party's product or service and is a kind of confusion the Lanham Act prohibits.").

Next, Defendants challenge the reliability of the Hollander survey because (1) Hollander surveyed the wrong universe; (2) the survey design used images that were not seen in actual commerce and some of the images were never used by Defendants; (3) the survey employed leading questions; (4) the survey failed to control for biases; and (5) Hollander did not take any validation measures to confirm that survey participants were a part of the intended universe. These criticisms, to the extent they have merit, go to the weight that should be afforded Mr. Hollander's survey, not to its admissibility. See Southland Sod Farms, 108 F.3d at 1143 (holding that objections based on the universe of survey participants and the use of leading questions went only to the weight, and not the admissibility, of the survey). Defendants may challenge the Hollander survey through cross-examination and the presentation of contrary evidence at trial, but the Court will not exclude the survey in its entirety....