Bath & Body Works, Inc. v. Luzier Personalized Cosmetics, Inc.

• Decision Date: 22 February 1996
• Docket Number: No. 94-3677,94-3677
• Citation: 76 F.3d 743
• Parties: , 37 U.S.P.Q.2d 1779, 43 Fed. R. Evid. Serv. 1131 BATH & BODY WORKS, INC., and Bathco, Inc., Plaintiffs-Appellants, v. LUZIER PERSONALIZED COSMETICS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 743

76 F.3d 743

34 Fed.R.Serv.3d 30, 37 U.S.P.Q.2d 1779,

43 Fed. R. Evid. Serv. 1131

BATH & BODY WORKS, INC., and Bathco, Inc., Plaintiffs-Appellants, v. LUZIER PERSONALIZED COSMETICS, INC., Defendant-Appellee.

No. 94-3677.

United States Court of Appeals Sixth Circuit.

Argued Aug. 11, 1995.

Decided Feb. 22, 1996.

Michael W. Donaldson, Vorys, Sater, Seymour & Pease, Columbus, OH, Frank J. Colucci (argued and briefed), Colucci & Umans, New York City, for Bath & Body Works, Inc., Bathco, Inc.

Michael J. Kelly, Wiles, Doucher, Van Buren & Boyle, Columbus, OH, William A. Rudy, Thomas H. Van Hoozer (argued and briefed), Robert D. Hovey, Hovey, Williams, Timmons & Collins, Kansas City, MO, for Luzier Personalized Cosmetics, Inc.

Before KEITH, KENNEDY, and SILER, Circuit Judges.

SILER, Circuit Judge.

Plaintiffs, Bath & Body Works, Inc., and Bathco, Inc., (collectively "Bath & Body Works"), appeal the judgment on a jury verdict for the defendant, Luzier Personalized Cosmetics, Inc., in this action alleging trade dress infringement. Bath & Body Works claims that several evidentiary rulings and certain jury instructions were erroneous. For the reasons stated herein, we affirm the decision of the district court.

I.

Since 1990, Bath & Body Works has been a nationwide retailer of personal care products. The business is a separate, wholly-owned subsidiary of The Limited, Inc. The trademark BATH & BODY WORKS is assigned to Bathco, Inc. Pursuant to a related company agreement with Bathco, Bath & Body Works is the exclusive user of the trademark, tradename and service mark "BATH & BODY WORKS." By 1994, there were 189 Bath & Body Works retail stores plus three BATH & BODY WORKS departments in Express stores (Express is a wholly owned subsidiary of The Limited) located in many principal cities throughout the United States.

Bath & Body Works stores and departments sell a wide range of personal care products such as gels, oils, lotions, creams, moisturizers, foams, shampoos and conditioners. In fiscal 1993 (February 1993 through January 1994), sales of Bath & Body Works' products exceeded $110 million. Additionally, it has expended in excess of $30 million on advertising and promotion of its products.

Luzier is a small, family owned and operated business based in Kansas City with about fifty employees. Although much smaller than Bath & Body Works, it is also a nationwide retailer of cosmetics and personal care products. Luzier sells its products in several category lines, including lipsticks, face, hair and bath and body. Luzier began selling products in its bath and body category around 1970. Products in its bath and body category include shower gels, body lotions and moisture baths.

Luzier traditionally has sold its products through individual sales representatives who call on their customers directly. In those areas not serviced by Luzier representatives, sales have been generated through their catalogs by mail order. Luzier presently has two retail stores operating in the Kansas City area. In 1992, Luzier updated its line of personal care products and introduced the label that is at issue in this litigation. Luzier also began distributing its products to grocery and drug stores.

The products for both Bath & Body Works and Luzier are sold in transparent cylindrical bottles with rounded shoulders and dark green caps. Bath & Body Works' original bottles had a parchment label with dark green print. Sometime in 1992, Bath & Body Works began using a new label design with a sunrise above the words "Bath & Body Works" and a colored rectangle with a cut out of the product's flavor. The new labels were "screened" on certain products such as bath gels. Luzier's products, which also have a parchment label, have the words "Bath & Body" in cursive writing. Luzier's products have a colored square with a cut out of the flavor above the words "Bath & Body."

In March 1993, Bath & Body Works filed this action against Luzier, alleging trademark and trade dress infringement pursuant to §§ 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), common law trademark infringement, trade dress infringement, unfair competition and violations of the Ohio Deceptive Trade Practices Act. The initial complaint mentioned only Bath & Body Works' original label. Later, Bath & Body Works amended its complaint to include the new label ("second generation label").

Prior to trial, the district court granted Luzier's motion to exclude the introduction of any evidence pertaining to Bath & Body Works' claims regarding the modified or second generation trade dress. The court held that Bath & Body Works could present its claim on the second generation label in a bifurcated proceeding. At the conclusion of plaintiffs' case, it ruled that, as a matter of law, the words "bath and body" were generic and dismissed Bath & Body Works' claims of federal and common law trademark infringement. On June 20, 1994, the jury returned a verdict in favor of Luzier on the unfair competition claims. Bath & Body Works declined to proceed with the second phase of the trial on its claims of infringement of the second generation label.

II.

Bath & Body Works sought to prove its case by introducing both its first and second generation labels. While the first label clearly predated Luzier's entrance into the market, both Bath & Body Works' second generation label and Luzier's product reached the market in 1992. The court ordered Bath & Body Works to produce documentation regarding when the second label was introduced, but Bath & Body Works stated that it had no documentation that would date the label. It asserted that the new label was considered a minor change, and, therefore, the product number (also called the "SKU" number) was not changed.

The district court conducted an evidentiary hearing on Luzier's motion in limine to exclude any evidence about the second generation label as a Rule 37 sanction. It found Luzier's request was timely and specific and the reasons offered by Bath & Body Works were not credible. The court found it incredible that a company with the expertise and resources of Bath & Body Works would not maintain documentation regarding such a change in the appearance in its product and in its labeling. It went on to find that the second generation trade dress more closely resembled Luzier's than the original and as Bath & Body Works was unable to establish that the second generation label was used prior to Luzier's use, it would be unduly prejudicial to allow introduction of any evidence regarding claims as to the second generation label. Consequently, the district court excluded Bath & Body Works' evidence regarding the second generation trade dress. It based its ruling on three alternative grounds: (1) as a Rule 37 sanction for failure to comply with discovery, (2) as a grant of a motion in limine to suppress, and (3) as a reconsideration of its earlier ruling granting Bath & Body Works' motion to amend its complaint to include claims for infringement of their second generation trade dress. Ultimately, the district court held that it would bifurcate the trial and that Bath & Body Works could present the second generation trade dress claim after the jury had heard the first generation claim.

Each of the alternative rulings is reviewed for abuse of discretion. Beil v. Lakewood Engineering & Mfg. Co., 15 F.3d 546, 551 (6th Cir.1994) (decision to impose sanctions under Rule 37 is reviewed for an abuse of discretion); Zamlen v. City of Cleveland, 906 F.2d 209, 215 (6th Cir.1990) (grant or denial of motion in limine to suppress evidence reviewed for a clear abuse of discretion), cert. denied, 499 U.S. 936, 111 S.Ct. 1388, 113 L.Ed.2d 444 (1991); and In re Bendectin Litigation, 857 F.2d 290, 307 (6th Cir.1988) (order of bifurcation is reviewed for a clear abuse of discretion), cert. denied, 488 U.S. 1006, 109 S.Ct. 788, 102 L.Ed.2d 779 (1989). This court need not determine whether the district court's ruling under Rule 37 or its grant of a motion in limine was an abuse of discretion as its decision to bifurcate the trial and allow Bath & Body to present evidence of the second generation label at the second phase cures any error. Thus, the only issue here is whether the district court's decision to bifurcate was a clear abuse of discretion.

Rule 42(b) of the Federal Rules of Civil Procedure provides that in order to promote convenience and economy or avoid prejudice, a district court "may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue...." "The decision whether to try issues separately is within the sound discretion of the court...." In re Bendectin, 857 F.2d at 307. "It follows, therefore, that a decision to try an issue separately will be affirmed unless the potential for prejudice to the parties is such as to clearly demonstrate an abuse of discretion." Id. at 308.

Here, the district court determined that Luzier would be prejudiced if evidence regarding both labels was presented in the same trial. The district court found that Luzier's label resembled Bath & Body's second label much more than Bath & Body's first label. It also found that Bath & Body would not be prejudiced by a bifurcated trial as the essence of the trade dress claim did not turn on aspects of the label that had been changed. The trial regarding the second generation trade dress was to be tried before the same jury that heard the first generation trade dress claims. Thus, the jury would have been permitted to consider any evidence presented in the first phase. Further, Bath & Body Works' original complaint alleged violations involving only the first generation trade dress. Bath & Body Works' survey evidence was already divided according to first and second generation trade dress. Moreover, Bath & Body Works was allowed to introduce some of the precluded evidence regarding the second generation trade dress during...